The 2012 election cycle did not change the balance of power in Washington, so how can Democrats and Republicans reach a compromise on taxes and spending in the upcoming lame duck session?

The fourth ranking Democrat in the U.S. House said Thursday he remains optimistic that a grand bargain can be reached.

The debt ceiling, Bush tax cuts, unemployment insurance, farm bill, Medicare, and the alternative minimum tax renewal all hang in the balance.

“If Congress does not take any action as it relates to both the debt and its programs, the sword automatically falls down both on the military side and the domestic side of spending,” U.S. Rep. John B. Larson told about 50 of his constituents in the basement of a Hartford church. “Both would be disastrous and either one alone would be disastrous.”

Under the terms of a temporary deal struck last year to prevent the U.S. from defaulting on its debt, the Bush tax cuts would expire as planned on Jan. 1, and a host of major, across-the-board budget cuts would take effect. The military’s budget would be cut 9.4 percent. Social programs like Medicaid and Social Security would take 8 percent cuts. A “payroll tax holiday” would expire, meaning even the working poor would take a hit.

Larson said there was the whole mind-set before the election of wanting to see “Obama fail rather than the nation succeed.” But with the 2012 election in the rearview mirror, Larson said there are more opportunities to reach consensus.

“Sequestration and the debt ceiling are both artificially imposed legislative responses that were unnecessary,” Larson noted during a 45-minute lecture on the budget at Phillips CME Church in the north end of Hartford. “They were put in place to provide political leverage at the time.”

President Obama has said he would keep the Bush tax cuts in place for the first $250,000 of income for everyone and allow them to expire for those earning more than $250,000 a year.

Republicans, on the other hand, campaigned on making the Bush tax cuts permanent. Democrats campaigned on allowing them to expire to boost federal revenue by $1 trillion and to help blunt automatic defense and discretionary cuts that will take place Jan. 1.

“You can’t see tax cuts for the very wealthy, while you’re taking away and not making solvent the programs that the middle class and the poor depend on,” Larson said.

He said the fastest way to lower the deficit is to get people back to work.

Paul Connery, a member of the No Labels movement, wanted to know if Larson would agree to legislation that would force him to forego his salary if no compromise could be reached.

The No Labels movement has gotten lawmakers to propose legislation in the House and the Senate which says that if Congress can’t make spending and budget decisions on time, they shouldn’t get paid on time either.

Connery said 70 Congressmen have signed onto the legislation, including U.S. Rep. Jim Himes. He wanted to know if Larson would join his colleague as a sponsor.

The former high school history teacher agreed to consider it as long as they take it to the Senate where 467 bills have been blocked.

He said the reasons these discussions over a “grand bargain” are being done behind closed doors is because if they come out with a proposal during the 24 hour news cycle they’re “immediately castigated, so they can’t possibly get to a majority.”

“Do you think Social Security, Medicare, and tax reform should be part of that grand bargain?” Connery asked.

“Yes,” Larson said. “As long as entitlement reform is not on the backs of the beneficiaries.”