Two Signs 2012 Mattered To the Fiscal Negotiations

There’s been an awful lot of talk about the impact of the 2012 elections on the ongoing fiscal negotiations in Washington in terms of the additional leverage the president either has or doesn’t have, or in the enhanced ability congressional Republicans either have or don’t have to depart from hard-core conservative ideology, particularly on taxes.

But it’s sometimes forgotten that the election–not just the outcome, but the experience of contesting it, and the resources built up to win it–had an effect on other political forces with a deep interest in the fiscal negotiations, and we’re already seeing them mobilize, viz. this report from HuffPost’s Sam Stein:

A coalition of top labor organizations is launching a major ad campaign targeting House Republicans and a group of Senate Democrats centered on pushing them toward a progressive resolution to the so-called fiscal cliff, The Huffington Post has learned.

The American Federation Of State, County and Municipal Employees, the National Education Association and the Service Employees International Union are teaming up on the project. It will include a “six-figure buy” with an “opening salvo of ads” focused on protecting health care, education and Social Security in any deficit or debt reduction deal, according to a labor source. The unions have argued that any final deal should instead lean more on higher tax rates for the wealthiest Americans.

Copies of the ads were not immediately available. But a source familiar with the campaign says they will air in Virginia, Missouri and Colorado, among other states. The Democratic senators in those states — Mark Warner of Virginia, Claire McCaskill of Missouri, and Mark Udall and Michael Bennet of Colorado — have all already voted to extend the Bush-era tax cuts only for income below $250,000. But they also considered to be among the likelier suspects to cut a deal with Republican lawmakers on a measure that would include more dramatic entitlement reforms.

It’s also often forgotten that congressional Democrats will have something to say about the fiscal negotiations, and they seem to have a renewed determination to make sure the short-term needs of the economy are met, as FireDogLake’s David Dayen notes:

One new wrinkle here is that Democrats are starting to talk about more stimulus as a bright line in the debate, a must-include in any deal. That could take the form of extending the payroll tax cut or something like it, or infrastructure spending. This hearkens back to the “barbell” approach, with spending up-front and deficit reduction on the back end. [Kent] Conrad, in his interview with Suzy Khimm, floated something like $300 billion of stimulus in 2013 as part of the deal.

So I wouldn’t be too quick in assuming the payroll tax holiday will be allowed to expire without protest even as the poor little rich folk fill the air with piteous cries over the possible expiration of the lowered top marginal rate on income that was “temporarily” enacted in 2001 to deal with an impending budget surplus too large to tolerate.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.