Dems in revolt over Obama tax compromise
Facing a backlash from Democrats over the tax-cut deal he struck with the GOP, a fiery President Obama lashed out at members of his own party on Dec. 7, telling them not to let a partisan fight scuttle the chance to keep taxes low for middle-class Americans.
Many Democrats have revolted against the deal — which would combine a two-year extension of the Bush-era income-tax cuts and a renewed estate-tax cut with a payroll-tax holiday and an extension of unemployment benefits for the long-term jobless — saying it marks a retreat from Mr. Obama’s campaign promise to let the tax cuts for the wealthiest Americans expire. They had pressed for the president to fight down to the wire.
But with gridlock threatening to extend through the end of the year, Mr. Obama said, he’s not willing to risk a tax increase on the middle class just to score partisan points.
“I’m not here to play games with the American people or the health of our economy,” Mr. Obama said at a surprise news conference in the White House press briefing room, called to try to build support for the deal.
It was unclear, though, whether he can secure the votes to pass it.
The nearly $1 trillion agreement has opened a deep divide with the left wing of his own party, which for years has decried the 2001 and 2003 Bush tax cuts as skewed to the wealthy, and has eagerly awaited their sunsetted expiration at the end of this month. Democratic leaders said they will try to alter the package, while Sen. Bernard Sanders, a Vermont independent who caucuses with Democrats, vowed to lead a filibuster.
“I think we have a winnable fight here,” Mr. Sanders said. “I intend to do everything I can to defeat this proposal and bring back something that protects the middle class and unemployed workers and not the wealthiest people in the country.”
Some Republicans also objected to the agreement, arguing that the mix of tax cuts and more spending will only worsen the government’s already deep fiscal hole.
Sen. George V. Voinovich, Ohio Republican and frequent budget hawk, said he’ll “stick to my guns” and vote against the deal. Some other Republicans said they weren’t sure how they would vote, calling themselves “conflicted” over having to accept higher spending in exchange for their sought-after tax cuts.
But centrist Republicans and Democrats praised the bipartisan deal, saying it would put an end to long-brewing uncertainty over the cuts, which are set to expire at the end of this year.
“If we don’t come to an agreement on taxes, everybody’s taxes are going to go up,” said Sen. Joe Lieberman, a Connecticut independent who also caucuses with Democrats, and who said Mr. Obama showed leadership in striking the deal after his preferred option of increased taxes for wealthier taxpayers was blocked in the Senate over the Dec. 4-5 weekend.
“It’s not going to pass, so it becomes a futile fight, and not just futile, but damaging to all the people who would pay higher taxes in January,” Mr. Lieberman said.
The deal Mr. Obama struck with Republicans would extend all of the Bush-era income-tax cuts, would extend unemployment benefits for 13 months, would set the estate-tax rate at 35 percent for estates valued at more than $5 million, and would give a one-year payroll-tax reduction, which amounts to a $120 billion tax cut.
Democrats had sought both a higher estate tax and had wanted to see the income-tax cuts extended only for individuals with incomes lower than $200,000, or couples with incomes lower than $250,000.
In pointed comments that seemed more aimed at his own party than the American public, Mr. Obama emphasized that he had agreed only to a temporary extension of tax cuts for the wealthy, which virtually guarantees that this same fight will break out again in 2012, in the heat of a presidential campaign.
The president said he welcomes that fight, but that his priority now is to make sure tens of millions of Americans don’t see a tax increase at the end of this month.
“This is the ‘public option’ debate all over again,” the frustrated president told reporters, referring to his administration’s decision to yield on a government-run insurance option favored by liberals in order to secure passage of his sweeping health care bill earlier this year. “If that’s the standard by which we are measuring success or core principles, then, let’s face it, we will never get anything done.”
In a bid to win over Senate Democrats, the White House sent Vice President Joseph R. Biden Jr. to the caucus’s lunch on Dec. 7, but judging by subse- quent statement to the press from Senate Majority Leader Harry Reid, Nevada Democrat, Mr. Biden failed to sell his former colleagues on the plan.
“I think we’re going to have to do some more work,” Mr. Reid said when asked if his party would back the agreement.
Trying to win over wavering Democrats, the Democratic National Committee, controlled by Mr. Obama’s allies, sent reporters copies of articles from liberal pundits who argued the deal was “imperfect, but not that bad” or “making the best of a bad situation.”
In his news conference, Mr. Obama argued that the looming shift in power — in January, Republicans will take control of the House and gain six seats in the Senate — meant the deal he struck was the best Democrats could hope for. He said Republicans have turned extending the tax cuts for the wealthiest Americans into their “holy grail.”
Perhaps signaling his disdain for the deal, at one point the president likened the GOP to hostagetakers, hearkening back to his accusations that they were holding the middle-class tax cuts “hostage.”
“I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed,” he said. “Then people will question the wisdom of that strategy. In this case, the hostage was the American people, and I was not willing to see them get harmed.”
Seth McLaughlin tributed to this report.
Pointed remarks: At a news conference on Dec. 7, President Obama likened the GOP to hostage-takers, hearkening back to his accusations that Republicans were holding middle-class tax cuts “hostage.”