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.