Top Dems Bless Schumer’s Hard Push On Taxes


When Sen. Chuck Schumer (D-NY) warned Democrats against ceding rate cuts to Republicans in tax reform negotiations, close observers viewed it as an effort to shake up ongoing bipartisan Senate negotiations over deficit reduction and the immediate spending cuts and tax increases automatically triggered early next year.

But his speech at the National Press Club Tuesday elided two key facts about all the backchannel discussions about taxes and spending going on in the Senate: nobody’s anywhere close to a deal, and even if they were, they’d still need to sell it to a certain skeptical Democrat — Senate Majority Leader Harry Reid.

“He’s supportive of the Schumer approach, thinks it’s smart to put the goalposts where Schumer set them,” said a Senate Dem leadership aide, who confirmed that Reid questions a framework — like Simpson-Bowles — which cedes tax rate cuts for top earners at the outset.Reid’s typically skeptical that ad hoc groups negotiating broad legislative bargains can reach accord or create good policy. And though he’s encouraged the group and would consider its suggestions if it produced an agreement, he’s also sitting on a Senate-passed bill in his hip pocket that would allow the Bush tax cuts to expire for top earners — legislation that requires no concessions from Democrats.

That’s trouble for the so-called Gang of Eight — the four Republicans and four Democrats who have been trying essentially to turn Simpson-Bowles’ deficit recommendations into legislation.

The full group — comprised of Sens. Tom Coburn (R-OK), Saxby Chambliss (R-GA), Mike Crapo (R-ID), Mike Johanns (R-NE), Dick Durbin (D-IL), Kent Conrad (D-ND), Mark Warner (D-VA), and Michael Bennet (D-CO) — met in person Wednesday in Mt. Vernon, Va., to continue their discussions.

One Gang of Eight source acknowledged that the members remain divided on nearly all key issues — including taxes, entitlement programs, and legislative process issues.

“[T]hey’re frankly not making much progress, certainly won’t have an agreement when today’s meeting is over,” the source said. “I’d put the odds at 50-50 that they ever reach an agreement [and] I can tell you with near certainty that there’s not gonna be any agreement before the election.”

The Obama administration, which has also typically premised negotiations on increasing top-bracket tax rates and plying additional revenues from high-income earners, gave Schumer its blessing Wednesday. White House press secretary Jay Carney:

“Senator Schumer is making is a very important point — that the wealthiest must pay their fair share in any balanced approach to reducing our deficit in a way that protects the middle class, seniors, and our ability to invest in education and innovation,” Carney said. “He’s making the very clear point that the President has made and others have made, that it is fanciful thinking to imagine that you can give more tax cuts to millionaires and billionaires and that the pixie dust of trickle-down economics will somehow erase any damage to the deficit or hold harmless the middle class.”

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