Democrats step up warning on 'fiscal cliff'
July 16th, 2012
05:29 PM ET
2 years ago

Democrats step up warning on 'fiscal cliff'

Washington (CNN) – A top Senate Democrat bluntly warned Monday that her party is prepared to let all the Bush-era tax cuts expire and automatic spending cuts to defense and domestic programs take place at the beginning of next year unless Republicans agree to raise taxes on the wealthiest Americans.

"If Republicans won't work with us on a balanced approach, we are not going to get a deal," said Sen. Patty Murray from Washington, the fourth-ranking Senate Democrat.

Together, the expiring tax hikes and mandatory spending cuts, the so-called "fiscal cliff," could hurt the economy if Congress does not work out a compromise to lessen their impact.

Republicans want to extend the Bush tax cuts for all income levels for one year to give lawmakers time to hammer out an agreement on comprehensive tax reform. They argue the tax cuts Democrats want to eliminate would hurt small businesses and stifle hiring. In addition, Republicans want to rescind billions in required spending cuts – known as sequestration - to the Department of Defense saying the steep cuts could devastate the military.

"So if we can't get a good deal, a balanced deal that calls on the wealthy to pay their fair share, the I will absolutely continue this debate into 2013 rather than lock in a long-term deal this year that throws middle class families under the bus," said Murray, who co-chaired the deficit reduction super committee that failed to reach a broad agreement earlier this year. "And I think my party, and the American people, will support that."

Murray's threat comes less than a week after top congressional Democrats met at the White House with President Obama to strategize how to deal with the expiring tax cuts and the sequester. The president has said he would veto tax cuts above the $250,000 threshold and Democrats have said repeatedly they would oppose changes to the required spending cuts unless Republicans agree to tax increases. Democrats also are against efforts that would only shield the Pentagon from cuts but not domestic programs.

Democrats are making this push now because they believe they are in the strongest political position in years to get rid of the tax cuts for the wealthy. Polls show strong support for letting them expire and Democrats are confident the GOP will lose public support if Republicans hold their ground by insisting an extension of tax cuts must include high earners, not just the middle class.

It remains to be seen whether Democrats actually will be willing to take the fragile economic recovery to the edge of the fiscal cliff. Almost two years, faced with a similar dilemma, Democrats agreed to GOP demands to extend the Bush tax cuts for all income levels. Democrats cited the poor economic conditions at the time for doing so. Republicans argue the economy remains weak and any tax hikes would harm the recovery.

Lawmakers in both parties concede serious negotiations over these issues are unlikely until after the November campaigns with the outcome of the elections likely driving the direction of the talks.

Meantime, Republicans blasted Murray's comments.

Senate Minority Leader Mitch McConnell, R-Kentucky, said the strategy could lead to a recession.

"What the Democrats are proposing today is an entirely avoidable high stakes game of chicken with the single minded goal of taking more money from those who earn it for government to waste, he said.

House Speaker John Boehner, R-Ohio, said in statement Murray was "threatening to derail our economy."

In her speech at the Brookings Institution, Murray, who heads the Senate Democrats' election effort, argued that by allowing the tax cuts to expire, Republicans could get around their long-held pledges, famously secured by low tax advocate Grover Norquist, not to raise any taxes.

"If the Bush tax cuts expire, every proposal will be a tax cut proposal and the pledge will no longer keep Republicans boxed in an unable to compromise," she said.


Filed under: Congress • Debt • Deficit • Patty Murray • Senate
soundoff (32 Responses)
  1. Terry

    You mean both sides get to play at this game? I thought only Republicans got to hold the economy hostage for ideaology. Now why didn't the Dems think of this when Republicans were painting them into a corner two years ago?

    July 16, 2012 05:42 pm at 5:42 pm |
  2. 4merRepubCT

    McConnell is worried about a "high stakes game of chicken"? Does he forget how his party held the country hostage last year over the debt ceiling increase and caused the country's credit rating to be lowered?

    As a solid middle-class Independent voter, I am for letting all of the Bush-era tax cuts expire, much as it will hurt. Give the Repubs what they want – deficit reduction – and let them take credit for the fall out.

    July 16, 2012 05:49 pm at 5:49 pm |
  3. rob

    So there you have it, the Democrats are so consumed with taxing the "Rich" they will let the whole economy fall off a cliff. Taxes are scheduled to indcrease as part of the Healthcare law anyway and its not just the marginal rate they want to raise. The dems would drastically incrase Cap Gains and dividend taxes that would put a huge wieght on our businesses, not to mention anyone who sells a house or cashes in stocks or mutual funds or IRA's for retirement or colleg costs etc.

    All these tax increase would pay for the federal Govt for about 3 weeks a year. Then what do they do???? They have no plan to reform Medicare, Medicade or Social security. In fact Obama care raides $500 BILLION from Medicare to help pay for the health Care debacle. They will NEVER slow the rate of Govt spending.

    July 16, 2012 05:51 pm at 5:51 pm |
  4. Myviewis

    Seriously, we are supposed to take serious the opinion of a pre-school teacher who holds a degree in physical education not finance, accounting, economics, business administration, statistics, financial management, trade & finance, political and economic development. Thank goodness they didn't make her head rocket scientist at NASA. A pre-school teacher is making decisions on our economy. What a joke!!!!!!

    July 16, 2012 05:51 pm at 5:51 pm |
  5. New Moon Rising

    Screw the republicans who signed Groovies Pledge... they should ALL BE HELD in the Capital Jail for Treason against the nation... Never should an elected official EVER sign a private contract to one individual that effectively Nullifies their capacity to do their job in congress... like getting a job as a brick layer and then having you one hand chopped off to spite the new boss ... hod them fo r treason.. they execute them if found guilty ...

    July 16, 2012 05:52 pm at 5:52 pm |
  6. Thomas

    Not like either party can go at it alone anyway, so if no compromise (I know that's a dirty word) is reached, the tax cuts expire and the mandatory spending cuts are put in place.

    July 16, 2012 05:55 pm at 5:55 pm |
  7. New Moon Rising

    Any member of Congress that SIGNS a Pledge, should Not Be Allowed to take the Oath of Office until they have officially abandoned ANY PREVIOUS PLEDGES... other wise face a Five panel judge for Treason against the Nation.

    July 16, 2012 05:55 pm at 5:55 pm |
  8. "If you've got a business, you didn't build that. Somebody else made that happen." --B. Obama

    I am happy to see our government is looking out for us.

    July 16, 2012 05:56 pm at 5:56 pm |
  9. Obama 2012 - MOVE Forward America, NOT another round of DUBYA's FAILURES

    Oh yeah.. bring it on. Neither party wants to address the mandatory cuts after the Bush Tax cuts expire on Jan 1st, 2013.
    However, we have a Presidential election to run before then, so neither side will really address that military and other spending will be decimated.. so it becomes election fodder. The GOP will state that it hurts the middle class (which according to Willard starts at $250K !!) and defense spending, and... This should be fun !!

    July 16, 2012 06:00 pm at 6:00 pm |
  10. Mr 1% the "VULTURE CAPITALIST BUSINESSMAN" will outsource all the poor, disabled, unemployed and elderly, to China and sell America to the highest bidder!

    "Now why didn't the Dems think of this when Republicans were painting them into a corner two years ago?"

    The GOP was going to throw all the unemployed on extended Federal benefits under the bus, so President O caved to help the unemployed and the very fragile economy, this time the economy is on firmer footing and most of us middle class folks can forgo the $14 a week the shrub "gave" us as a tax break.

    The GOP has already thrown the unemployed under the bus on a state basis, like they have here in Georgia, so that cannot be used as club on a Federal level.

    Any more questions?

    July 16, 2012 06:05 pm at 6:05 pm |
  11. rs

    Don't worry- the Republicans have no intention whatsoever to do anything of value before November. They seem to have this notion that by making themselves as useful to America as Al Queda, that we'll all fall in love with the GOP again.

    July 16, 2012 06:07 pm at 6:07 pm |
  12. Larry L

    The right-wing actually wants our federal government to fail as evidenced by their actions to get our S&P bond rating lowered. Conservatives profess to prefer a "small government" but one tightly-controlled by a group of Christian zeolots and their narrow-minded ideology. They are the American Taliban.

    July 16, 2012 06:08 pm at 6:08 pm |
  13. Wes B.

    Line in the sand. This will show that GOP cares more about the rich than the middle class.

    July 16, 2012 06:13 pm at 6:13 pm |
  14. Logic N LA

    It's time for Democrats to step up and be Democrats. Republicans have the bluster, but this time they better have something more than hot air if they hope to save their precious programs.

    July 16, 2012 06:17 pm at 6:17 pm |
  15. Jerry

    Sen. Patty Murray dream on stupid!!!

    Terry, are you an ignoramus or what?! Don't tell that you did not know that both Republicans and Democrats play these games. Democrats are masters at it, though. However, I have a gutt feeling that this time Ms. Patty-cake and the rest of the lying Democrats are going to have to swallow their pride.

    Ms. Patty-cake showed her hand too soon. She has played into the Republican strategy. If I was a Republican elected official, which I am NOT, I would call her bluff.

    Stay tuned...

    July 16, 2012 06:17 pm at 6:17 pm |
  16. scott

    Dems do not care about America, they only support their tin god Obama who hates America and wants to pattern it after the European socialist countries.

    July 16, 2012 06:20 pm at 6:20 pm |
  17. chuck weidemann

    The temp tax cuts expire....then vote on who to give new tax cuts to......sounds good to me! Everyone gets a chance to be a hero and compromise will be the word for the next year. Let the defense budget get cut ...this is the agreement arranged for,now It's put up or shut up time and let the people vote.

    July 16, 2012 06:25 pm at 6:25 pm |
  18. Irvine, CA Voter

    The President should have let it expire then. Stop playing games with these GOP/Teatards and take care of the Middle-class Americans. Obama2012

    July 16, 2012 06:33 pm at 6:33 pm |
  19. Willard-The king for "of-shoring"

    Let them all expire! This is from democrat who will give his vote to Obama again!

    July 16, 2012 06:33 pm at 6:33 pm |
  20. Len

    I agree. Let them all expire. In 2010 we voted in Grover Norquist. Now let the tea party folks and GOP take the brunt of not willing to compromise. You voted these nut jobs in so guess what we will all pay our fair share. Including the wealthiest who have had a wonderful 13 years.

    We should also start the draft, so more than 1% of our population have to feel the affects of war. All of us should have that honor. Including Gov. Romneys 5 boys!!!!!

    July 16, 2012 06:43 pm at 6:43 pm |
  21. CAWinMD

    This really is a no-brainer. If keeping taxes low for the wealthiest led to job creation, then we'd be rolling in jobs right now. The fact that we're not shows that Republicans have no data to support their position, only ideology.

    And before people go off saying stupid things, this is nothing like the debt-ceiling hostage taking that Republicans did. The full faith and credit of the United States is not on the table for this debate. This is once and for all making the Republicans put up or shut up on this issue. Without any intervention, about 7 trillion dollars will be cut from the budget over the next 10 years. This should make Republicans ecstatic, because it is exactly what they wanted done - no tax increases, just spending cuts. The fact that Republicans are fighting this shows them for the two-faced hypocritical liars they are on this. They don't want the real cuts - just the issue.

    July 16, 2012 06:44 pm at 6:44 pm |
  22. Pander Bear

    The GOP is the party that created this "fiscal cliff" when they messed around with the debt ceiling and caused our credit rating to be downgraded. They wanted to show their Teabagger masters they were serious about reducing the debt. The fact that they won't consider asking for a penny more from the Romneys of our country is an indication that they are not at all serious about anything other than trashing the entire nation because they don't like Obama.

    July 16, 2012 06:51 pm at 6:51 pm |
  23. California Gary

    It's about time the Dems got into the game and started playing hardball. They kept showing up to the game armed with nothing but cream puffs. Time to give the Repubs a high and tight fastball to get their attention.

    July 16, 2012 06:53 pm at 6:53 pm |
  24. Liz the First

    The Dems need to play as hardball as the rethugs have for the past 3 years. the Bush tax cuts have nearly bankrupted this country and at the very least, they need to go away for the wealthiest. the rethugs are far more interested in protecting the wealthy than helping the country out of the mess they got us into. when enough folks wake up to this fact, maybe we can get them all out of office and truly move this country forward.

    July 16, 2012 06:55 pm at 6:55 pm |
  25. Andy

    This Grover Norquist pledge is a cult following. ABout time the dems dished out the same music the republicans did to them 2 yrs ago.

    July 16, 2012 07:02 pm at 7:02 pm |
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