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Democrats Divided on Averting Fiscal Cliff

As President Obama reaches out to progressive activists to get their temperature on budget compromises, Politico reports that the Democratic Party may have an even more difficult time unifying their members around a deal than the GOP:

Yet getting a deal that raises tax rates for the wealthy may not be so easy for the party, and not just because of inevitable GOP resistance.

Senate Majority Leader Harry Reid (D-Nev.) will have to find 60 votes to extend just the middle-income tax rates — far from a given when a swath of the Senate’s moderate Democrats are up for reelection in 2014.

Reid and the White House will also need to navigate a hardening Democratic divide on entitlements. Progressives don’t want any deep cuts that Republicans will insist on for a deal. But a Third Way poll of 800 Obama voters set for release Tuesday found that efforts to fix Medicare and Social Security enjoy broader support than liberals suggest. 

Even if Speaker John Boehner (R-Ohio) were to risk his job by backing a tax-rate increase, there are Democrats who think a $250,000 income threshold is too low. So finding 218 House members to pass a bill that would extend the lower tax brackets isn’t exactly a cakewalk. Want Boehner to raise taxes? Republicans privately say the entitlement changes would have to be unimaginably sweeping.

This may be the best position liberal Democrats will be in for a long time. Not only do they believe they have a tax-raising mandate from the presidential election, they also know that Republicans have a decent chance to take back the Senate in 2014. That could make the more strident among them less willing to compromise. And some liberals, like Paul Krugman, argue that Democrats may have more leverage if they just go over the fiscal cliff, allowing tax rates to rise across the board. On this, they risk overreaching, like they did on health care. As Politico notes, public support for reforming entitlements is higher than liberal Democrats acknowledge, putting Senate Democrats up for reelection (many of them in swing states or Republican-leaning states) at odds with liberal Democrats in the House.



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