For Democrats, Choice Between No Deal or Bad Deal?

Posted October 16, 2011 at 5:59pm

Despite public calls yet again for a “grand bargain” on deficit reduction, some Democrats — particularly in the House — are beginning to concede privately that a super committee failure would be preferable to a bad deal.

Late last week, House Minority Leader Nancy Pelosi (D-Calif.) sent a letter, packaged with recommendations from Democratic ranking members, to the Joint Committee on Deficit Reduction co-chairmen, Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas), urging the powerful panel to go “even larger” than its minimum savings target of $1.2 trillion over 10 years.

“The House Democratic Caucus is firmly committed to a deficit reduction plan that is big, bold and balanced,” Pelosi wrote in the letter.

But Republicans have walked away from negotiations on tax agreements multiple times, and Democrats are skeptical that their GOP colleagues will be able to deliver on what Democrats believe is the “balanced” part of the deficit reduction equation.

Democrats have repeatedly said they cannot support a super committee deal that does not include revenues, which might leave them with their next best option: mandatory across-the-board cuts, known as sequestration, which were built into the original debt limit agreement approved in August. The bill calls for automatic spending reductions to take place in January 2013 if the panel fails to construct a plan or if Congress does not pass what it produces.

From the Democratic perspective, $1.2 trillion in cuts will happen regardless of whether the super committee succeeds, according to sources tracking the issue. But if sequestration kicks in, top Democratic priorities such as Medicaid, Medicare, Social Security and unemployment insurance — which were exempt from the trigger — would be left untouched. Approximately half of the mandatory cuts would come from defense spending. It’s a prospect that concerns the GOP so much that top Republicans such as Senate Minority Whip Jon Kyl (Ariz.) and Sen. John McCain (Ariz.) have said they would work to nullify the sequestration agreement.

Kyl, who sits on the super committee and is a top ally of Senate Minority Leader Mitch McConnell (R-Ky.), has made it clear he would not support further defense cuts, which would make it very difficult for the panel to include them in any final package. Meanwhile, Republicans are pushing hard for Democrats to make good on their professed willingness to rein in social safety-net programs.

Those close to Pelosi insist that House Democrats are not rooting for the super committee to fail, pointing to her many public statements and noting that the Caucus would like the panel to include economic stimulus proposals. With the 2012 elections near full-throttle, many view a potential super committee deal as the last legislative train out of the station. House Democrats last week pushed for the panel to take up jobs initiatives such as those President Barack Obama has proposed.

“She has never said that House Democrats want sequestration,” a Democratic leadership aide said. “These are all ridiculous accusations from people who are unaware of the Democratic Caucus position, which she clearly spelled out.”

Even if Pelosi hasn’t publicly said so, Democrats are clearly weighing whether sequestration is a better option for them.

In a briefing book submitted to Democratic super committee members, a left-leaning Washington think tank tackled the issue of how serious failure would be if the 12 members of the bipartisan, bicameral panel could not get the seven minimum votes necessary to approve a plan.

“If the [committee] deadlocks or its bill is defeated, is that a ‘failure’ that will have serious adverse effects on the economy? No,” the memo from the Center for Budget and Policy Priorities reads.

It continued in italics: “[T]he key question is whether the [committee’s] tax and mandatory spending proposals are better or worse than the cuts that would occur under sequestration.”

And that position is one that rank-and-file House Democrats, especially liberals, are not shying away from.

“If we’re only going to be talking about cuts, and we still have Medicare and Medicaid on the table, I think it’s going to be problematic for a lot of Democrats in the House,” Rep. Raúl Grijalva said, noting that sequestration would be a better alternative for his party if Republicans do not agree to raise some taxes as part of any super committee agreement.

“As not [a] last resort, but a resort, yes,” said the Arizona Democrat, who is a co-chairman of the Congressional Progressive Caucus.

Rep. Gerry Connolly (D-Va.) added, “Sequestration is not attractive, but it may be an option. An undesirable option. … In my view, I cannot imagine my side of the aisle agreeing to just cuts. Then, sequestration looks, bad as it is, better than that.”

Adding to the complexity of the issue is where Senate Democrats might stand. Though it would be easy to find Members, particularly liberals, who agree that sequestration would be better than what they perceived as a lopsided deal, the Joint Committee for Deficit Reduction itself was the brainchild of Senate Majority Leader Harry Reid (D-Nev.).

In August’s Budget Control Act, Reid got his panel, Speaker John Boehner (R-Ohio) got a level of deficit reduction equal to the amount of funds it would take to raise the debt ceiling, and McConnell got a series of resolutions of disapproval to raise the debt ceiling — a procedural trick that would allow Republicans to say they voted against raising the debt limit while also enabling the president to avert a potentially catastrophic default.

Reid, therefore, has a vested interest in the super committee’s success, but that might not jibe with the interests of a diverse Democratic Party.

Last week, Congressional leaders met with Murray and Hensarling in McConnell’s office without Pelosi, who was not informed in advance of the meeting. Though it is unclear what was discussed between Reid, McConnell, Boehner and the debt panel members, it raises questions of whether there is division, real or perceived, among Democrats on how hard to push for a super committee deal. No reason was given for Pelosi’s exclusion from the meeting.

At an event in Washington, D.C., on Friday hosted by National Journal, super committee member Rep. Chris Van Hollen (D-Md.) reiterated that he felt all parties were working in good faith.

“I’m absolutely convinced that all 12 members are working hard to try and reach an agreement for the good of the country,” Van Hollen said. “Whether we are able to overcome some of the obstacles by the end of the day is still unclear. But everybody is working hard toward that goal.”

Jessica Brady contributed to this report.