WASHINGTON — A leading senator on Monday suggested Democrats are willing to let the country fall off the “fiscal cliff” at the end of the year if Republicans won’t agree to raise taxes for upper-income Americans.
“If we can’t get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013,” said Sen. Patty Murray, a Washington-state Democrat. “And I think my party, and the American people, will support that.”
At the end of this year, Congress and the president will face an unprecedented fiscal crisis, where budget cuts to the U.S. military are set to begin and tax cuts implemented by both President George W. Bush and President Barack Obama are set to expire.
In a speech at the Brookings Institution in Washington, Murray decried a GOP-backed plan to continue tax cuts for the wealthy. President Barack Obama and leading Senate Democrats want tax reductions to stay in place for couples making $250,000 or less and single people making $200,000 or less.
Murray, a senior member of the Senate Budget Committee and former co-chair of the Joint Select Committee on Deficit Reduction, said Republicans must compromise or face consequences.
The non-partisan Congressional Budget Office estimates the effects of the looming fiscal cliff could stunt economic growth and push the U.S. economy back into a recession in 2013. Individuals and businesses will continue to face an uncertain future unless long-term policies are implemented, a CBO report on May 22 said.
Murray said she remains optimistic that Democrats and Republicans will be able to reach a deal before the end of the year. If not, she said compromise in 2013 should be easier because Republicans will not be held to their promise not to raise any taxes, which many members of Congress signed at the behest of anti-tax advocate Grover Norquist.
“If the Bush tax cuts expire, every proposal will be a tax-cut proposal, and the pledge will no longer keep Republicans boxed in and unable to compromise,” Murray said.
A spokesman for the ranking Republican on the Senate Budget Committee, Alabama Sen. Jeff Sessions, immediately took issue with Murray’s remarks and said the Democrats are the ones holding up budget planning.
“To this day, no one has seen the Senate Democrats’ budget plan because it does not exist,” Sessions’ spokesman said. “Under its current leadership, the Senate has not adopted a budget resolution for an all-time record of 1,174 days.”
Democratic-leaning experts agreed with the bold plan Murray outlined.
“As a negotiating tactic, it makes sense,” said Alice Rivlin, a senior fellow at Brookings and the former vice chairman of the Federal Reserve and Office of Management and Budget Director under President Bill Clinton. “Going off the cliff is risky but it has some advantages. It would mean the debt ceiling isn’t a problem and it would buy some time to think of a better answer.”