White House officials point to last week’s fiscal-cliff agreement to “buy down” the sequester for two months. The deal delayed the implementation of automatic across-the-board spending cuts to domestic and defense programs and paid for it with $12 billion in revenues and $12 billion in spending cuts — evenly divided between defense and non-defense spending.
Administration officials view that as a template for future deficit-reduction agreements.
But Democrats in Congress are not yet unified on the issue. Sen. Tim Kaine, a Democrat who won his first term in November’s election, said the spending cut-to-tax increase ratio should be higher.
“Obviously, that second half of the fiscal cliff is the tough spending decisions,” he said. “During the course of the campaign I often talked about 2-1 as a total. That would count all the spending reductions that have already been agreed to.”
“I think if you’re looking at a 70-30 ratio, somewhere in between 2 to 1 and 3 to 1, I think that’s a reasonable position,” said newly elected Sen. Chris Murphy (D) of Connecticut, who noted he is from a “fiscally responsible” state.
Like Kaine, Murphy said “you could factor in the cuts already made.”
Congress agreed to cut spending by $917 billion in 2011 and to raise $620 billion in additional tax revenues last week, settling on a ratio of roughly 3 to 2 so far.
If Pelosi were president, she said she'd invoke the 14th Amendment, which says the validity of the public debt of the United States "shall not be questioned," to raise the debt ceiling unilaterally.
And she lamented the state of the modern GOP, arguing that Democrats' record of cooperation with President George W. Bush during his two terms was not matched by today's "over-the-edge" GOP.
"I keep saying to my Republican friends, 'Take back your party'," Pelosi said. "This isn't the Grand Old Party that did so many things for America, that commanded so much respect."
"This is really an over-the-edge crowd, that's the way I see it," she said. "The fact is that it is dominated by an element that are anti-government ideologues, and are committed to not cooperating with this president, and it is hard to understand."
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