Sen. Reid Exits Fiscal Cliff, Sequestration Talks Only to Return Hours Later

And then there were two. And then, suddenly, three again.

Talks on avoiding the so-called fiscal cliff and massive cuts to projected federal spending briefly lost another participant Sunday when Senate Majority Leader Harry Reid, D-Nev., signaled he would take a backseat and allow Senate GOP leaders and the White House to seek an accord.

“I wish them luck,” Reid said on the Senate floor shortly after 2 p.m. of Senate Minority Leader Mitch McConnell, R-Kent., and the Obama White House. “There are still serious differences” between the two sides, Reid said.

Reid’s departure from negotiations followed that of House Speaker John Boehner, R-Ohio, just before Christmas when his own GOP caucus opted against supporting a plan he intended to bring to a vote to raise tax rates on individual earners who make more than $1 million annually. House Minority Leader Nancy Pelosi, D-Calif., has never been a major player.

“We are not where we could come forward and say, ‘We have this for you’,” Reid told a packed Senate chamber on a rare working Sunday. “I’m not overly optimistic that we can get something done. I’m cautiously optimistic that we can get something done.”

But by 5 p.m., as he emerged from a closed party caucus meeting, Reid appeared to be re-engaging.

When asked by a throng of reporters whether Senate Democrats would make a new counteroffer, Reid said stoically: “We just did.” He then entered the Senate chamber without offering details.

McConnell said in his own floor statement after 2 p.m. EST that he hopes to strike a deal, but bluntly said he needs a “dance partner” to do so. That partner likely will be Vice President Joe Biden.

In journalist Bob Woodward’s latest book on 2011 budget negotiations between the White House and lawmakers, Obama administration aides described Biden as “the McConnell whisperer,” a moniker based on the two men’s working relationship built during decades as senators.

The split between McConnell and Reid came over GOP-proposed changes to something known as “chain CPI,” outgoing Senate Armed Services Committee member Joseph Leiberman, I-Conn., told Defense News.

That issue was floated earlier in the weeks-long talks by President Obama, but remains very unpopular among congressional Democrats. And without their support, a deal will not pass the Senate.

“One of the proposals we made was something called chain CPI, which sounds real technical, but basically makes an adjustment in terms of how inflation is calculated for Social Security,” Obama said during an interview that aired Sunday on NBC’s “Meet the Press.” It is “highly unpopular among Democrats, not something supported by AARP, but in pursuit
of strengthening Social Security for the long-term, I’m willing to make those decisions.

Reid, however, is not.

“We’re not going to have any Social Security cuts,” Reid said, saying he would not agree to cuts to that entitlement program, “especially if it gives more handouts to the rich.”

Meantime, as the upper chamber members prepared to wrap up the day’s lone scheduled vote and head into separate party caucus meetings to discuss the fiscal cliff efforts, there was confusion among some senators about whether $500 billion in defense cuts would be addressed at all in any bill on which lawmakers might vote Sunday or Monday.

Leiberman told Defense News the Reid-McConnell deal “might not have to touch sequestration.” That’s because, he said, if it raises enough projected revenues by raising tax rates on high-income earners, savings now slated to be applied to a $1.2 trillion deficit-reduction goal via across-the-board defense cuts would be rendered unnecessary — and, therefore, void.

But veteran Sen. Barbara Boxer, D-Calif., had a different view.

“We’re kind of in a period where members don’t know yet what we’ll be voting on,” Boxer said in a brief interview while while walking to her office from the Senate floor.

Boxer said it is unclear whether sequestration would be covered by the still-emerging Reid-McConnell plan, but believes it would not be addressed.

Should Reid and McConnell fail to reach an accord, Reid is expected to bring up a Democratic-crafted measure that closely resembles a plan Obama sent lawmakers before Christmas.

“If we vote on the president’s plan,” Boxer said, “then, I believe, because he does not want the sequester cuts to happen, they would be addressed in that bill.”

John T. Bennett

John T. Bennett

Bennett is the Editor of Defense News' CongressWatch channel. He has a Masters degree in Global Security Studies from Johns Hopkins University.
John T. Bennett