Democrats step up warning on 'fiscal cliff'
July 16th, 2012
05:29 PM ET
10 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. Four and The Door

    "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.
    Oh boy! A Democrat throwing out ultimatums threatening to hold up progress for the nation unless taxes are increased. Someone who cares might remind Senator Murray that this is an election year and Republicans are very interested in capturing the Senate too. I'm sure they appreciate reckless remarks like this to help make sure that happens.

    July 16, 2012 07:26 pm at 7:26 pm |
  2. skytag

    Republicans love to tell us that "most" Americans want the ACA repealed, yet polls clearly show much greater support for raising taxes on the highest incomes and Republicans staunchly oppose that.

    July 16, 2012 08:07 pm at 8:07 pm |
  3. CutTax

    say dem – socialists NO

    July 16, 2012 08:22 pm at 8:22 pm |
  4. art

    stop allowing gop to run roughshod over nation. if small businesses were going to do any better toward hiring they would have. this is just another bs job by the gop dawgs. call their bluff. unemployed will make it. one way or the other.

    July 16, 2012 08:39 pm at 8:39 pm |
  5. ZedATL

    "Republicans argue the economy remains weak and any tax hikes would harm the recovery."

    Since when did they care about the recovery? They've voted against every stimulus, construction, and jobs bill except for the last one. They voted against the payroll tax cut, unemployment extensions, and only begrudgingly kept student loan rates from doubling.

    It's a little late to start worrying about the "weak recovery" dontcha think?

    July 16, 2012 09:42 pm at 9:42 pm |
  6. S.B. Stein E.B. NJ

    There needs to be a better understanding that taxes are needed. They pay for just about everything that the government does. All people rely on the government in some way shape or form. I dare someone to show me that they never use any government services. The wealthy put so little money into the social welfare programs that are run by charities. If there was enough, then there would be no need for programs like food stamps or training programs.

    July 16, 2012 11:00 pm at 11:00 pm |
  7. jesse james. take them to street and shoot them like the dogs they are

    You want something well you got to give up somrthing. The gopt and rumknee sucks.

    July 17, 2012 07:19 am at 7:19 am |
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