Senate Democrats threaten to step off fiscal cliff

Sen. Patty Murray (Reuters) The murmurs from Democrats that they'd be willing to step off the "fiscal cliff" at the end of the year and deal with the fallout next year with the new Congress are getting louder. At the end of the year, we'll see the expiration of the Bush tax cuts and the automatic spending cuts in defense and domestic programs agreed to in last year's Budget Control Act kick in. Toss in expiring unemployment benefits, the payroll tax holiday and Medicare payments to doctors, and it's actually an effective bit of hostage-taking on the Democrats' part to force Republicans to reconsider their opposition on letting the Bush tax cuts for the wealthy expire.

In a speech today, Sen. Patty Murray (D-WA), number four in the Senate Democrats' leadership team, reiterates the threat.

'If we can't get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013,' Murray plans to say, according to excerpts of the speech provided to The Washington Post.

If the tax cuts from the George W. Bush era expire and taxes go up for everyone, the debate will be reset, Murray is expected to say. 'Every proposal will be a tax-cut proposal,' according to the excerpts, and Republicans would no longer be 'boxed in' by their pledge not to raise taxes.

'If middle-class families start seeing more money coming out of their paychecks next year, are Republicans really going to stand up and fight for new tax cuts for the rich? Are they going to continue opposing the Democrats' middle-class tax cut once the slate has been wiped clean? I think they know this would be an untenable political position.'

For their part, Republicans are predictably outraged. Senate Minority Leader Mitch McConnell says it's an 'outrageous ultimatum.' But Sen. John McCain's devotion to a bloated Pentagon is so great that he says he might be willing to negotiate to avoid those cuts "by 'closing loopholes' to replace scheduled military cuts."

'If you said 'John McCain, are you for increasing taxes?' the answer is still no,' McCain said, pointing to federal subsidies for ethanol as an example of a loophole that could be closed without 'raising taxes.' He added, 'We get into such semantics.'

McCain has had plenty of opportunity to close some of those loopholes, particularly for Big Oil, and so far hasn't done it. You need a block of salt to take his promises with. But, McCain'along with a handful of other Republican hawks'is genuinely freaked out by the prospect of defense cuts. It's a good hostage for Democrats to threaten to take to get some real concessions on taxes, if they'll stick to their guns.