Un­happy Democrats say tax bill likely to pass

The Pak Banker - - 6international -

WASHINGTON: Slowly, painfully and re­luc­tantly, con­gres­sional Democrats are slog­ging their way to­ward ac­cep­tance of Pres­i­dent Barack Obama's tax cut com­pro­mise, which would let rich and poor Amer­i­cans keep Bush-era tax cuts that were sched­uled to ex­pire this month.

Af­ter Obama pub­licly de­fended the plan for a third day Wed­nes­day, and Vice Pres­i­dent Joe Bi­den met with Demo­cratic law­mak­ers in the Capi­tol for a sec­ond day, sev­eral Democrats pre­dicted the mea­sure will pass, mainly be­cause of ex­ten­sive Repub­li­can sup­port.

Rep. Bar­ney Frank, DMass., pre­dicted the tax cut com­pro­mise "will be passed by vir­tu­ally all the Repub­li­cans and a mi­nor­ity of Democrats." He said he would vote against it.

Even among Democrats, "there's more sup­port in the cau­cus than there ap­pears," Rep. Ger­ald Connolly of Vir­ginia told re­porters af­ter he and fel­low Democrats met with Bi­den. "I think some peo­ple felt they had to vent."

Obama said more con­gres­sional Democrats would climb aboard as they stud­ied de­tails of the $900 bil­lion year-end mea­sure.

Rais­ing the direst alarm yet, his ad­min­is­tra­tion warned fel­low Democrats that if they de­feat the plan, they could jolt the nation back into re­ces­sion.

Larry Sum­mers, Obama's chief eco­nomic ad­viser, told re­porters that if the mea­sure isn't passed soon, it will "ma­te­ri­ally in­crease the risk the econ­omy would stall out and we would have a dou­ble-dip" re­ces­sion. That put the White House in the un­usual po­si­tion of warn­ing its own party's law­mak­ers they could be to blame for calami­tous con­se­quences if they go against the pres­i­dent.

With many House and Se­nate Repub­li­cans sig­nal­ing their ap­proval of the tax cut plan, the White House's com­ments were aimed mainly at House Democrats who feel Obama went too far in yield­ing to Repub­li­cans' de­mands for con­tin­ued in­come tax cuts and lower es­tate taxes for the wealthy.

Obama says the com­pro­mise was nec­es­sary be­cause Repub­li­cans were pre­pared to let ev­ery­one's taxes rise and to block the ex­ten­sion of un­em­ploy­ment ben­e­fits for job­less Amer­i­cans if they didn't get much of what they wanted.

Econ­o­mists say the re­cent re­ces­sion of­fi­cially ended in June 2009. But with un­em­ploy­ment at 9.8 per­cent, mil­lions re­main out of work or fear­ful of los­ing ground eco­nom­i­cally, and the no­tion of the nation fall­ing back into a re­ces­sion would strike many as chill­ing. It also could rat­tle mar­kets and in­vestors.

The deal Obama crafted with Se­nate Repub­li­can lead­ers would pre­vent the sched­uled Dec. 31 ex­pi­ra­tion of all the Bush ad­min­is­tra­tion's tax cuts en­acted in 2001 and 2003, even though Obama had of­ten promised to end the cuts for the high­est earn­ers.

House Democrats, who will lose their ma­jor­ity in Jan­uary, still hold a 255-179 edge in the cur­rent Congress. To pass a big bill with mostly Repub­li­can votes would mark a dra­matic de­par­ture from re­cent bat­tles, such as the health care over­haul, which was en­acted with vir­tu­ally no GOP sup­port in ei­ther cham­ber.

Speaker Nancy Pelosi and other House Demo­cratic lead­ers re­mained out­wardly neu­tral to the tax cut com­pro­mise, crit­i­ciz­ing some as­pects but stop­ping short of urg­ing or pre­dict­ing its demise. -Ap

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