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Oregon Rep Peter Defazio spoke out Monday, urging the president and Democratic leaders not to give in to Republican lawmakers on taxes, Medicare and Medicaid. Negotiations on reducing America's budget deficit and national debt have been stalled because, while both parties agree that the budget crisis must be fixed, they can't agree on how to do that.
Democrats should follow through on President Barack Obama's promise to include tax increases on incomes above $250,000, DeFazio said.
"This December should be about revenues," said DeFazio, speaking on MSNBC's The ED Show. "Then we can go on to have discussions about the long-term solvency of Medicare and where Medicaid fits into Obamacare, and all the changes that are coming by 2014 as we move ahead with Obamacare. But revenue's got to come first."
The tax issue has been a sticking point, as almost all the Republicans in the current Congress have signed a pledge not to increase any taxes. Created by right-wing activist Grover Norquist, the pledge is designed to prevent government from raising revenues in any form. Since the election, several Republicans have said they might renege on the pledge, but in exchange they want cuts to entitlement programs.
Obama advisor David Plouffe has signaled willingness to put those programs on the table.
"We want to engage in comprehensive tax reform," Plouffe said Nov. 14 at the University of Delaware. "We also need to engage in entitlement reform. You know Medicare Medicaid these are chief drivers of our deficit. We made progress with Obamacare and there's a lot more to do. There's spending we have to cut…
"That means Republicans have to step up and be mercilessly criticized by Grover Norquist and it means Democrats are going to have to do some tough things on spending and entitlements that they'll get criticized by the left."
But DeFazio said President Obama should be setting the agenda, based on the promises he made during the election.
"I think he (David Plouffe) got the Republican talking points mixed up with his," he joked.
"It's like the election never happened. It's back to where the president was negotiating and Republicans had a stronger hand, and where they were threatening the full faith and credit of the United States government with an economic collapse. He won. He won big on taxing the upper income people, and not hitting the middle class with more cuts…
"Social Security? Not a penny to the debt or the deficit. Medicare? You want to see a quarter of a billion over 10 years? Easy. Let's negotiate prescription drug prices, like every other advanced industrial nation on earth does. That saves a quarter of a billion a year for Medicare. And Medicaid is more essential now than it's ever been, and it's a key part of Obamacare."
If no agreement is reached before the end of the year, the Bush-era tax cuts will expire, and tax rates will increase for everyone. At the same time, fixed-rate, across-the-board spending cuts will reduce government spending on everything from defense and education to social programs. Economists warn that this sudden exit of cash from the economy will hurt the recovery, and could throw the country back into a recession.
Sen. Linsday Graham, R— S.C., was just one leading Republican who said he would consider voting for increased taxes on the wealthy, so long as entitlement reform is also on the table. Speaking on ABC Sunday, Graham said:
"To do this, I just don't want to promise the spending cuts. I want entitlement reforms. Republicans always put revenue on the table. Democrats always promise to cut spending. Well, we never cut spending."
Meanwhile, Sen. Bob Corker, R—Tenn., has been circulating a $4.5 trillion plan that calls for increasing the Social Security retirement age to 68, and cutting annual cost-of-living raises. It also would raise the Medicare eligibility age to 67. Corker's plan would raise tax revenue by capping itemized deductions at $50,000.
But DeFazio argued that if Republicans won't accept tax hikes for the wealthiest Americans, Democrats might as well wait until after Jan. 1. The newly-elected Congress will be more centrist, he said, so it will be more friendly to Democrats.
"Revenues have got to come first," he said. "And they should come first because we hold all the aces. We've got five aces in our hand. Because if we do nothing all the tax cuts expire. And Republicans don't have to worry about their pledge to Grover Norquist, because what they are doing is voting to reduce taxes for middle-income families and working Americans, and – sorry – they just can't do anything about the millionaires and billionaires, and the unearned income which is going to go back to Clinton-era rates. Which, guess what, worked pretty darn well for the economy when Clinton was president."
David Plouffe and Republican strategist Steve Schmidt discussed the election and its aftermath at the University of Delaware.
