Bay Area congressional delegation digs in on 'fiscal cliff' talks
Congressional Republicans long ago signed their well-publicized "no tax increases" pledge. But Bay Area House Democrats made clear this week that they have their own, equally strong commitment to preserving the federal safety net for the poor and the elderly -- and their words indicate why it's going to be so hard for the country to avoid the looming "fiscal cliff."
Interviews with most of the region's congressional representatives, many on the left edge of the House's Democratic minority, showed that most are unwilling to cut entitlements such as Medicare to the extent that Republican leaders say is necessary to get conservatives to agree to raise taxes on the rich.
On Thursday, both Democrats and Republicans said the talks aimed at reaching a deal have hit an impasse. House Speaker John Boehner, R-Ohio, accused the White House of not offering serious spending cuts. The Obama administration accused Republicans of balking at raising taxes on the wealthy, despite the president's insistence that tax hikes be part of the deal.
Comments from the Bay Area's congressional delegation indicated just how difficult it will be at this point to get liberal Democrats to compromise.
"Don't touch any part of the benefits," said Rep. Barbara Lee, D-Oakland. "Senior citizens are barely hanging on as it is."
Most members of the delegation pooh-poohed the notion that a detailed deal was in the offing. They painted a picture of a Congress in flux,
with lame ducks departing and freshmen arriving, as veterans jockey and posture for leadership positions. Congress, they said, is trying to assemble a fiscal and economic jigsaw puzzle without knowing how many pieces there are.
"You're dealing with the entire federal budget. That's why it's hard for people to get specific," said Rep. George Miller, D-Martinez. "This is a pretty exhaustive process ... even if the politics are pretty simplistic."
A lame-duck period such as this "was never meant for an undertaking of that magnitude," said Rep. Anna Eshoo, D-Palo Alto. "It would be the equivalent of saying, 'Let's do comprehensive immigration reform in the next two-and-a-half weeks.' There's no such thing. You have to take time and be thoughtful about it."
GOP aides late Thursday leaked an offer from President Barack Obama that Boehner had just rejected. Bay Area members liked some parts of the offer: tax hikes for the rich and an extension of emergency unemployment benefits. But others, including $400 billion in cuts over 10 years from federal health and retirement programs, would be hard pills for liberals to swallow.
Most fiscal experts, however, agree the nation needs at least the framework of a deal by year's end so as not to shake what little confidence consumers, investors, businesses and the rest of the world still have in the U.S. and its economy.
Eric Schickler, a UC Berkeley political-science professor, said most Americans will probably settle for a framework if they believe the next Congress will cooperate enough to execute it. "But if there is this sense that there will be no agreement at all ... you have to worry a little bit about a kind of self-fulfilling prophecy -- people getting freaked out a little bit," he said. And that could mean a loss of investor confidence, depressed consumer spending and maybe another downgrade of the U.S. government from bond-rating agencies.
As congressional leaders and the White House seek a deal, Bay Area House members are in lock step about extending Bush-era tax cuts only for couples earning less than $250,000 per year. Republicans oppose letting rates rise for the wealthy, but "absent that, you can't get the revenue figures that almost everyone admits are necessary to get a balanced package and do the deficit reduction that people want to achieve," Miller said.
Bay Area lawmakers also agree this isn't the time to tinker with Social Security, which they note has its own funding stream independent of the federal budget and doesn't add to the nation's debt. And all are leery about cutting programs on which the poor, seniors, children and struggling working-class families rely.
"My record is pretty clear about not kicking people when they're down," Eshoo said. "I've never done that, and I'm not going to start now."
Even the region's liberal Democrats, however, differ on some nuts and bolts.
Miller; Eshoo; Zoe Lofgren, D-San Jose; and Sam Farr, D-Santa Cruz, all said the "payroll tax holiday" -- a 2 percentage-point drop in paycheck deductions for Social Security, in effect for the past two years -- probably should be allowed to expire.
"People have gotten used to not having to pay it, but I think that's certainly on the table," Farr said.
But Lee; Jerry McNerney, D-Stockton; and Mike Honda, D-San Jose, oppose letting the tax break expire. "Anything that's going to reduce the net take-home pay of ordinary people, we need to not do," Lee said.
Democrats and Republicans do agree on some things: Both hate the idea of accepting the automatic cuts to which Congress and Obama agreed in 2011 to end the debt-ceiling standoff: about $110 billion per year from 2013 to 2022, split evenly between defense and nondefense discretionary spending.
With the ax about to fall, Republicans favor reducing the defense cuts, while Democrats want to cushion the blow on the domestic side.
But how?
Mike Thompson, D-Napa, said "everything that's a fiscal driver needs to be on the table." But, he added, "what's not negotiable are the things that would hurt working families, things that would hurt children, things that would further harm us economically."
Some Bay Area members want to see the impact of most cuts delayed. "It's better to identify reductions that click in when we've gotten a little further out of this recession," Lofgren said, noting that severe austerity measures plunged several European nations back into economic decline. "The time to do big reductions is when you have a little prosperity."
Miller hopes most in Congress will agree to take a longer view. He cited the pay-as-you-go budget rules -- basically meaning Congress can spend a dollar only if it saves a dollar elsewhere -- that were enacted during President Bill Clinton's first term but abolished during President George W. Bush's first term, clearing the way for big tax cuts and putting war spending on the credit card.
"If you don't change the behavior of the Congress with something like 'pay as you go,'" Miller said, "I suspect we're going to be back here in a few years about to go over a fiscal cliff -- except we'll be lying at the bottom of the previous one."
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