Fiscal cliff: Three possible scenarios Democrats may pursue
December 21st, 2012
01:39 PM ET
2 years ago

Fiscal cliff: Three possible scenarios Democrats may pursue

Washington (CNN) - House Speaker John Boehner and President Barack Obama insist they're not giving up on the - currently stalled - one-on-one talks to avert the fiscal cliff, but regardless, sources in both parties now believe that with Boehner's Plan B having bombed, the next move will now start in the Senate.

A senior Democratic Senate source laid out three scenarios Democrats in the Senate are considering: either go over the cliff; push for a fall back measure, an alternative to going over the cliff; or push for a broad deal, such as the deal Obama offered Boehner last weekend, which Democrats said included $2 trillion in tax increases and spending cuts.

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More on the thinking behind each possibility, from the senior Democratic Senate source:

1) Go over the cliff – When the new Congress convenes on January 3rd, Democrats will have more seats - and they see themselves having a stronger hand. If we go off the cliff December 31st, the markets don't open again until Wednesday January 2nd. Yes – the move could produce a bad psychological reaction, but the hope would be to correct that by passing a deal as soon as the new Congress is sworn in on January 3rd.

In this scenario, the politics of the vote in the new year would be much easier because the politics of the tax vote would be turned on its head: instead of voting to raise taxes, the vote will be to cut taxes, since the Bush era tax cuts will have already expired at the end of 2012.

Democrats will have 55 votes in the Senate, and would only need 5 Republicans to cross party lines and back their measure. The Democratic hope in this scenario is that the pressure on Senate Republicans would be so intense that it would be hard for at least five GOP Senators to vote no on any package that includes keeping taxes low for the middle class, as well as other important elements.

2) Fallback scenario – The Senate would take the bill it already passed earlier this year to keep Bush tax cuts in place for households with income below $250,000, and add other important items which will include sweeteners for Republicans, including the alternative minimum tax (AMT) fix, "doc fix" (delay in payments to Medicare providers), and estate tax extension at current rate.

This would be harder for Senate Democrats to pass since they will need seven or eight Republicans in the current Congress to cross party lines. The Democratic source said this would entirely depend on whether Senate Republican Leader Harry Reid and Obama could line those GOP votes up. They also want to be sure whatever they pass could also pass the House. What Reid is privately telling people is that he does not intend to have Senate Democrats take a tough vote that will go nowhere in the House.

3) Pass big package - The Senate would take the latest offer from President Obama to Boehner with tax increases on household income over $400,000 and the spending cuts he proposed, or something close to it, and turn it into a piece of legislation and try to pass it, the Democratic source suggested. Again, the same political imperative for the fall back scenario would apply to this – Senate Democrats would have to be sure they could get enough Republicans, seven or eight, to cross over and pass this. They also want to be sure it pass the House before going this route.

Needless to say, options two and three would have to be done sometime next week after Christmas. The window is small – just a few days.


Filed under: Fiscal Cliff • Senate Democrats
soundoff (34 Responses)
  1. SK

    Eh – let's call it quits for the year. Need to spend my wealth on Christmas presents. Fiscal cliff won't affect me anyway.
    Cheers GOP

    December 21, 2012 01:45 pm at 1:45 pm |
  2. Rudy NYC

    All along the Tea Party plan had been to get draconian cuts passed into legislation, and then renege on the defense spending cuts and tax increases. That was all well and good until the 2012 election didn't turn out as planned. Seeing how they didn't really have a "Plan B", they're proceeding full steam ahead with the original plan, hoping no one notices them. Silly rabbits.

    December 21, 2012 01:46 pm at 1:46 pm |
  3. Ed1

    How about this option only spend what you have period.

    Obama was re-elected because Mitt promised jobs and Obama promised more hand outs.

    People we have got to stop the out of control spending it is estimated by the end of Obama's second term we will be 20 Trillion in debt.

    Why can't you just see that the hand outs have got to stop and that does not include SS and Medicare I have paid 45 years into this and it's not a hand out.

    Make our government accountable for overspending.

    The current Congress was elected to stop the over spending in 2010 and guess what they were re-elected in 2012 to do the same thing.

    December 21, 2012 01:48 pm at 1:48 pm |
  4. Claudia, Houston, Tx

    Grover Norquist still holds the GOP by the throat and we will hold the Republicans responsible for taking us over the cliff.

    December 21, 2012 02:01 pm at 2:01 pm |
  5. Act III: 2013 Tea Bag suicide march to the fiscal cliff

    Here comes the republican Balanced Budget Ammendment on trainer wheels!

    This suicide brought to you by righteous conservatives, who want tax breaks for everyone and no government.

    December 21, 2012 02:03 pm at 2:03 pm |
  6. Tim

    Here are the three Democratic actions: Obstruct, obstruct, obstruct.

    December 21, 2012 02:09 pm at 2:09 pm |
  7. Kelby in Houston, TX

    They should have taken Obama's initial offer

    December 21, 2012 02:15 pm at 2:15 pm |
  8. Robert

    I like Plan 1. Let the Bush Era taxes expire.

    December 21, 2012 02:16 pm at 2:16 pm |
  9. vintel7

    Republicans = useless narcissists who are only interested in protecting the rich, the polluters, and their Assault weapons. Worthless idiots. Too bad the world did not end today.

    December 21, 2012 02:19 pm at 2:19 pm |
  10. vintel7

    If Bohner spent more time addressing the needs of the American people and less time on the beach or in the tanning booth, this country might not be in the mess it is now in. The President had a good plan and as usual the worthless Republican blocked and obstructed. Unemployment benefits ran out this week. Merry Christmas! Me and my family are going homeless thanks to this Congress of compassion-less idiots and narcissists.

    December 21, 2012 02:22 pm at 2:22 pm |
  11. Rudy NYC

    Tim

    Here are the three Democratic actions: Obstruct, obstruct, obstruct.
    -------------------------
    Really? That's a bold charge. Don't you think that it's pretty hard for Democrats to do that when McConnell filibusters his own bill, and Boehner won't even bring his own bill to the floor for a vote.

    December 21, 2012 02:22 pm at 2:22 pm |
  12. Fortinbras

    Go over the cliff. Then try to pass tax cuts to the middle class in january. This congress has to go.

    December 21, 2012 02:22 pm at 2:22 pm |
  13. tony

    @ EDI
    Where were you when the refoolikkklans won the presidency took the house and senate give tax cuts to the rich, and two wars all of these things were done with no way to pay them back and you are talking about out of control spending, you guys are just hypocrits.

    December 21, 2012 02:28 pm at 2:28 pm |
  14. Larry Boston, Massachusetts

    Merry Cliffmas everyone

    December 21, 2012 02:28 pm at 2:28 pm |
  15. J'Cincinnati'Redd

    I say go with option 3. Come on my fellow republicans,atleast it give us something? I tell you I had so much respect for the speaker of the house but not anymore. he is a good guy, his house is like 25min away from mine.we are not the top 2%. I dont want tax rates going up on anyone,but my god if you cant get the top 2% thats to bad. But what about the rest of us? He is acting weak.

    December 21, 2012 02:29 pm at 2:29 pm |
  16. tony

    you rethuglikkklans will mess up the economy and blame the other party juveniles.

    December 21, 2012 02:29 pm at 2:29 pm |
  17. i'malib

    Actually, this is good for people like me. This means more money in my pocket. Just because people have a job and make money doesn't mean they actually deserve it. They should give it to people who really need it. Like me. With that said, Oprah is on and my kids should be back with my food for Christmas. Food stamps only go so far.

    Merry Christmas. Now get back to work.

    December 21, 2012 02:30 pm at 2:30 pm |
  18. Larry Boston, Massachusetts

    The most polarizing, partsian and just plain rude politician in DC has to be Harry Reid. If he keeps up his personal rude attacks on the Speaker, he will get what he deserves - expiration of all Bush tax cuts; automatic spending cuts going into effect; payroll tax holiday expiration; and a battl;e royale on the debt ceiling.

    I vote for this.

    December 21, 2012 02:30 pm at 2:30 pm |
  19. Fair is Fair

    Over the cliff. Let EVERYONE feel the pain.

    Hi Ho, Hi Ho, it's over the cliff we go....

    December 21, 2012 02:31 pm at 2:31 pm |
  20. ted van tol

    Tim

    Here are the three Democratic actions: Obstruct, obstruct, obstruct.

    Now, who is obstucting here? It.s the Republicans who are, with just one goal; Obama's faillure!
    But most American's are not so stupid and they will back Obama in the elecions for senate and congress.
    A few happy years are comming. A recovering economy, an end to the Aghan war, a democratic majority in congres and senate and most inmporaint; the end of Republican government for a decade. Thank you verry much Tea party.

    December 21, 2012 02:39 pm at 2:39 pm |
  21. Sniffit

    "The Democratic source said this would entirely depend on whether Senate Republican Leader Harry Reid and Obama could line those GOP votes up. "

    Just plain stupid, CNN. Proofread.

    December 21, 2012 02:41 pm at 2:41 pm |
  22. Sniffit

    "Obama was re-elected because Mitt promised jobs and Obama promised more hand outs."

    Obama was re-elected because Mitt promised magical unicorn farts and insulted large swaths of America by claiming that they would vote for Obama solely because he was promising more hand outs.

    FIFY

    Get over it. America wants a societal safety net, and we're going to keep it, whether you like it or not.

    December 21, 2012 02:44 pm at 2:44 pm |
  23. chilly g

    mr president we can not let a few hateful peoples( the gop tea part) about 60 to 70 gop continue to harm our country
    if there no agreement then taxes will go up on everyone and then we can reduce them to the level the president want.
    THE GOP IS IN A WEAK POSITION BECAUSE TAXES WILL AUTOMATIC GO UP ON EVERYBODY INCLUDING
    PEOPLES MAKING OVER 400,000

    December 21, 2012 02:47 pm at 2:47 pm |
  24. David

    Obamas latest offer was a very balanced, mature approach that had far more cuts than anything concrete the repubs have put forward – bring it to vote and see what happens – there will be some responsible Repubs that will leave their Tea Party counterparts behind and vote for it fearing political suicide if they do not.

    December 21, 2012 02:50 pm at 2:50 pm |
  25. Paula R

    Plan 1 sounds good to me. Let those tax cuts expire.

    December 21, 2012 02:51 pm at 2:51 pm |
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