Ski SlopeEverything said by a major political figure on the fiscal slope should be considered in the context of a negotiation right now.

But House Democratic Leader Nancy Pelosi laid out a bright line this weekend, echoing many other Democrats in saying that merely cutting loopholes to raise revenues would not be sufficient for a deal.

She went further, however, by saying that no deal could take place without an increase in the top marginal rates.

I don’t actually think that the tax side of the deal will be the holdup this time. A growing faction on the right realizes that they were offered a gift last time in the form of token tax rises, and that they could work to change those in the future while locking in cuts to the safety net. Digby had this catch from Alan Greenspan over the weekend that I think speaks volumes:

Remember, it’s always easier to cut taxes politically than it is to cut spending. So if you have to allow a significant rise in taxes to essentially cut a deal on a major benefit cut, that’s a good deal for me because it’s always easier in the future to cut — politically to cut taxes than it is to cut spending.

If enough Republicans consider the long game, they will accede to the tax hikes to get the safety net cuts. And that appears to be the direction in which we’re headed.

Democrats, meanwhile, so far have talked a good game on deficits. Even House Democrats have a role to play here; because Republicans will lose a healthy handful of votes on the far right, who will never in their lives vote for a tax increase, House Democrats hold some leverage over any deal. And it’s a more ideologically coherent caucus now. There were 54 Blue Dog Democrats in 2009-2010; in the 2013-2014 Congress, there will be 14. Even the President has said to civil rights and faith leaders that he will protect the vulnerable in any deal.

Perhaps the most unsettling part of the weekend’s revelations, however, is the emergence of the former Vice Presidential candidate, from his old role as House Budget Committee chair, in the talks.

Speaker John A. Boehner has tapped Mr. Ryan, who has returned to his post as the House Budget Committee chairman after an unsuccessful run for vice president, to help strike a deal to avoid big tax increases and spending cuts by the end of the year, and to bring along fellow Republicans.

“He helps us toward creating a product,” said Senator Rob Portman, Republican of Ohio, “and he helps sell the product.” [...]

With his new muscle and increased respect from his colleagues, Mr. Ryan could conceivably scuttle any deal if he loudly opposes a solution that the speaker and the top Republican leaders embrace. But his conservative base might rebel against him if he were to endorse any deal seen as awarding too much to Mr. Obama and the Democrats, particularly on tax rates. Some Republicans think the pitfalls are dangerous enough that Mr. Ryan might consider leaving Congress altogether to work on his policy agenda without the inherent headaches of the Hill.

Leaving Congress? That would be just terrible, wouldn’t it? More likely, Ryan would support any deal from leadership and try to sell it to the conservative wing. He did it with TARP. He did it with the auto rescue. He did it with stimulus during the Bush Administration. He’ll do it with this deal.

Photo by RenoTahoe under Creative Commons license