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ThePlumLIneGS whorunsgov plumline
Posted at 04:32 PM ET, 07/31/2012

Which is higher priority: National security, or low taxes on rich?

Republicans such as John McCain and Lindsey Graham have been touring swing states to highlight the looming sequester cuts to defense spending that are set to be triggered by the deficit supercommittee’s failure. They have said such cuts will be devastating to our national security, and have blamed Obama and Dems for the imminent threat.

At the same time, House Republicans will vote this week against the Democratic plan to extend tax cuts on all income over $250,000, because it doesn’t extend the cuts on all levels, including income higher than that.

So here’s the question: If the looming sequester cuts are such a threat to national security, why doesn’t that undermine Republican leverage in the discussions over what to do about the tax cuts?

Let’s review how we got here. The sequestered cuts are the result of legislation that both parties agreed to in setting up the deficit supercommittee. In theory, the point of the sequester was to force all parties to the table to reach a deal on the deficit; Republicans would balk at the defense cuts, while Democrats would not accept the other domestic spending cuts that failure would trigger.

Right now, as then, the main obstacle to a big deal that would avert the sequestered cuts is that the two parties can’t agree on whether to extend the tax cuts on the highest earners.

Democrats have signaled that they are prepared to let all the tax cuts expire temporarily if necessary to increase leverage over the GOP. Whether they intend to go through with this or not, Democrats can fairly point out that they already agreed to spending cuts demanded by Republicans as part of the 2011 government shutdown and debt ceiling fights. Republicans, by contrast, have not agreed to new revenues.

Republicans will vote against the Dem tax cut plan in the House this week, and don’t seem prepared to support any tax hikes on the rich as part of any deal to avoid the sequestered cuts. Republicans will argue that they already floated their own propoal to avert those cuts. But that GOP proposal was simply to replace the defense cuts with more domestic spending cuts Dems can’t stomach, and the whole point is that a compromise is going to be necessary to avoid the sequester.

And this could allow Dems to argue that Republicans are more willing to allow defense cuts that they themselves say are a threat to the nation’s security than they are to allow taxes to go up on the wealthy.

“We all agree that sequestration is a terrible way to cut spending, which is exactly why any Republican who is as concerned as Democrats are about its impact on families and national security should be pushing the House to pass the Senate’s tax cut bill that would go a long way toward replacing it in a balanced way,” Senator Patty Murray said in a statement sent my way. She added that the GOP leadership appears “far more interested in protecting the rich from paying a penny more in taxes than in working with Democrats to avoid sequestration and the fiscal cliff.”

I agree with those who say we need to be wary of the Dem handling of the coming negotiations; a grand bargain that nixes the sequester and includes new revenues from the rich but also entitlements cuts seems possible. But on the raw politics of this, look for Dems to lean harder into the case Murray made above after the House votes against the Dem plan to extend the middle class tax cuts, when they’re back in their districts during the coming recess.

By  |  04:32 PM ET, 07/31/2012

 
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