Democrats toasted the New Year’s fiscal cliff deal with the belief that they had set a crucial new precedent: Tax hikes would be part of any future deficit reduction package.
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Two months later, the champagne buzz is wearing off.
With about $85 billion in spending cuts — and no new revenue — kicking into gear on Friday, it appears that the exuberance expressed by many Democrats at the beginning of the year was misplaced. Efforts to avert the sequester never achieved liftoff, and Democrats are realizing that new tax revenues are off the table for the immediate future.
“We lost the bet on just how intransigent the Republican majority can be,” Rep. Gerry Connolly (D-Va.) told POLITICO. “We made a mistake betting on reasonable compromise ultimately prevailing. We bet on that and we lost.
The sequester was initially set to take effect on Jan. 1, but the fiscal cliff deal bought two months for Congress to find an alternative. That delay was paid for through spending cuts as well as a new tax on some retirement savings.
