Dem 51
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GOP 49
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Democrats Are Furious That Biden Is Not Demanding Tax Hikes from McCarthy

In the first week of Negotiating 101, the students learn that you should always ask for more than you expect to get so you can gracefully concede some things you "want" in return for the other side also giving up things they want. The chance that the negotiations between Joe Biden and Speaker Kevin McCarthy (R-CA) result in any tax increases is pretty low. Nevertheless, many Democrats are upset that Biden is not asking for them and not willing to drop his demand unless McCarthy gives up on something he wants.

For example, Biden could insist on not dropping talk of tax hikes unless McCarthy stops talking about cutting the IRS budget, especially since cutting IRS' budget would result in less revenue and thus make the deficit worse. It would be easy for Biden to say: "I agree with your goal of reducing the deficit and the best way is higher taxes on rich people." But he's not doing that. Rep. Bill Foster (D-IL) said: "That's what sucks. We should have a 1-to-1 ratio between revenue and cuts." Rep. Dean Phillips (DFL-MN) said about the meetings: "I do not want to undermine the current negotiation, but I'm deeply disappointed that wasn't immediately met with demands for revenue increases—at least loophole closures, for goodness' sakes. That was a big mistake." Numerous other Democrats have also criticized Biden for not pushing for tax increases on the wealthy. At the very least, those demands could be bargaining chips.

The result is a lopsided negotiation. It is all about how much the Democrats have to give up of things that hold dear and the Republicans don't have to give up anything in return. It is close to a mobster saying: "Nice house you have there. It would be a pity if something happened to it." In previous debt fights, the Democrats always insisted on tax increases for the rich at first and sometimes it worked. It was never given up lightly. Maybe Biden learned the technique of minimizing your asks from Obama, who famously never even asked for "Medicare for all" during his negotiations with the Republicans about the Affordable Care Act. He could have and agreed to drop it in return for a few Republican votes, but he didn't. Maybe Biden needs to read a few biographies of Lyndon Johnson.

In other default-related news, the parties are united internally with little progress in sight. Republicans are all behind McCarthy—so far. Many of them do not believe that the government will run out of money on June 1, which is actually next Thursday, not next Tuesday as we wrote yesterday. Democrats are all in favor of a discharge bill that would force a floor vote on a clean bill to raise the debt ceiling, but they need five Republicans to join them. It may go down to the wire, and beyond. (V)

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