February 20, 2013

Ever since Senate Democrats unveiled their plan to avert the sequester with a mix of new revenues and spending cuts, there has been no negotiations between the Democratic and Republican leadership offices in the Senate about it, a senior Senate Democratic aide tells me. No discussions about any potential compromises. No signal to Harry Reid’s office of any kind from Mitch McConnell that Republicans may be open to even discussing new revenues.

That’s not terribly surprising, given that Republicans are adamantly opposed to asking for even a penny in new revenues from the wealthy in order to avert a sequester that they themselves say will damage the military and the economy. But it highlights the emerging view among Democratic aides about how this is likely to play out.

Democrats believe the real action on the sequester has yet to come, and will ramp up in earnest in March. Which means, of course, that the cuts will kick in. Democrats no longer see the sequester as sufficient to force Republicans to cave on new revenues; rather, they increasingly see the looming government shutdown deadline of March 27th as the real means for them to force a GOP surrender.

The idea is that the sequester isn’t as dramatic a deadline as the fiscal cliff and debt ceiling deadlines were. And in any case, Dems believe Republicans plainly need to mount a stand against new revenues, and not back down, in order to give conservatives a “victory,” if you can call it that. Once that happens, Dems hope, and the sequester begins kicking in during the month of March, the looming government shutdown deadline — combined with increasing uneasiness about the sequester among GOP-aligned constituencies, such as defense contractors — will be the one that will ultimately force some Republican concessions on revenues.

“The sequester doesn’t have that immediate shock value,” a senior Senate Democratic aide tells me. “It’s not the kind of thing where people wake up on March 1st and realize it happened. It doesn’t have the sort of acute impact that the fiscal cliff or debt ceiling did. We need a harder backstop to really force this fight.”

That “harder backstop” is the threat of a government shutdown, which gets the attention of the public — and with the GOP brand in trouble, Dems hope, it will be hard for Republicans to cling to their no-revenues-at-any-costs stance. “March is the month where negotiations will really ramp up,” the aide says.

There is simply no endgame in which Dems cave and accept only spending cuts to offset the sequester, the aide insists. That’s because no set of spending cuts is preferable to the sequester, from the point of view of Dems, so there’s no incentive to make such a deal.

“There is no other formulation of the sequester that is more appealing to us than the current formulation,” the aide says, referring to formulations that only include cuts. “The hit in defense is not any worse for us than the hits we would take from our base from agreeing to non defense discretionary cuts. That’s why at the end of the day there has to be revenues.”

So the sequester is all but certain to hit. And then the fighting will really intensify in March. Fun times!

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UPDATE: Post edited slightly for clarity.