Obama struggles to keep Dems from killing tax cuts
Tuesday, December 07, 2021 9:33 PM

Related Stories



(Source: Associated Press/AP Online)By STEPHEN OHLEMACHER and CHARLES BABINGTON

WASHINGTON - President Barack Obama struggled Tuesday to prevent wholesale defections by fellow Democrats that could sink the tax deal he worked out with Republicans - angry opposition that could subject millions of Americans to a big holiday-season tax increase.

Many GOP lawmakers seemed ready to embrace the Obama-GOP compromise and declare victory. The question was whether enough Democrats would join them in support, especially in the House, where liberal resentment of the president's concessions on tax breaks for the wealthiest runs strong.

Obama went on national TV to give a ringing defense of his compromise, declaring it the necessary price for heading off a tax increase that neither taxpayers nor the weak economy could stand and for gaining more months of unemployment payments for millions of jobless workers.

The compromise plan would extend unemployment benefits for millions of people, and reduce Social Security payroll taxes for a year. Workers would pay a 4.2 percent tax rate instead of 6.2 percent.

Democratic leaders in the House criticized the tax plan, sometimes harshly, but stopped short of saying they would try to block it.

In a 35-minute news conference, Obama chastised liberals for seeking ideological purity that would cause legislative logjams on vital issues. He didn't spare Republicans, either, likening them to "hostage takers" willing to hurt the great majority of Americans for the "holy grail" of extending tax cuts for millionaires.

House Speaker Nancy Pelosi was noncommittal before and after Obama's afternoon appearance, saying she would discuss the matter with fellow Democrats. "So far the response has not been very good," she said after meeting with other Democratic leaders.

Another House Democratic leader, Rep. Chris Van Hollen of Maryland, said he couldn't recommend the package to his colleagues.

Obama said no one is entirely happy with the compromise he crafted with Republicans, but "it's a good deal for the American people."

"This country was founded on compromise," he said.

If Democrats kill the tax plan, it would mark a stunning defeat for Obama and a huge political bet that voters will blame Republicans as much as Democrats for an impasse that leads to higher taxes starting Jan. 1. Few on Capitol Hill believe Democrats will take that gamble. But liberal lawmakers' discontent is hard to measure in the wake of last month's big election setbacks.

Despite their minority status, Senate Republicans managed last week to block Obama's long-promised bid to end Bush-era tax cuts for households earning more than $250,000. They insisted that all the tax cuts from 2001 and 2003, scheduled to expire in three weeks, be extended, for rich and poor alike.

"I have not been able to budge them," Obama said. Without a compromise, he said, 2 million unemployed people "may not be able to pay their bills, and tens of millions of people who are struggling right now are suddenly going to see their paychecks smaller" because of income tax increases.

"I'm not here to play games with the American people or the health of the economy," he said.

Besides the most-publicized proposals, the plan would continue other programs such as enhanced tuition tax credits for college and breaks for businesses that hire new workers. And it would set the estate tax at a rate preferred by Republicans.

Under current law, the estate tax, which was repealed for 2010, is scheduled to return next year with a top rate of 55 percent. Obama's package would set the top rate at 35 percent, and each spouse could exempt up to $5 million from taxation.

Overall, officials said, the plan could increase federal borrowing by $900 billion.

The lower estate tax emerged as the biggest obstacle among many House Democrats. Pelosi called it "a bridge too far."

Unless both houses approve some version of the tax proposal before Congress adjourns this month, income taxes will rise for virtually all workers. Democrats hinted Tuesday they wanted a few more sweeteners to make the package less distasteful, but it wasn't clear what they might be.

"We're going to have to do some more work," Senate Majority Leader Harry Reid said after a closed-door meeting with Vice President Joe Biden and other Democratic senators.

Many House Democrats emerged from a spirited closed-door caucus Tuesday evening and said they would have a difficult time supporting the package.

"I don't think that the president should count on Democratic votes to get this deal passed," said Rep. Anthony Weiner, D-N.Y. "It's a bad deal that wasn't skillfully negotiated."

Rep. Earl Pomeroy, D-N.D., said, "It seems to me this Congress should not be adding substantially to the deficit."

House Democrats will lose their majority in January, but they still hold a 255-179 advantage in the current Congress that has a few more days of life.

Democratic staff members speculated that, for now, more than half of House Democrats seem inclined to oppose the compromise plan. Republican aides said many GOP members probably would back it, because it grants their chief goal of extending income tax cuts for all Americans.

Some moderate Democratic lawmakers praised the plan. The office of Rep. Gerry Connolly, D-Va., noted that he long has supported "the position now embraced by President Obama for extending all of the Bush tax cuts, temporarily."

But some of Obama's closest allies assailed the compromise.

"It lards the tax cuts for the top 2 percent with an indefensible cut in the estate tax - giving yet another bonus to the super-rich," said AFL-CIO President Richard Trumka. "It is unconscionable that the price of support for struggling middle class families and workers who have been unable to find jobs for months and months and months is yet more giveaways for our country's wealthiest families."

The liberal group MoveOn said its 5 million members oppose the tax plan. "The president's commitment to bipartisanship should not mean leaving principles behind," MoveOn said.

---

Associated Press writers David Espo, Julie Hirschfeld Davis, Ben Feller and Julie Pace contributed to this report.

A service of YellowBrix, Inc.

 

Sponsors

Symbol :

Advertisement

Market news:

  • Surgeon general: 1 cigarette is 1 too many Dec 09, 2021 12:32 AM

    • WASHINGTON - Think the occasional cigarette won't hurt?
    • Even a bit of social smoking - or inhaling someone else's secondhand smoke - could be enough to block your arteries and trigger a heart attack, says the newest surgeon general's report on the killer the nation just can't kick.
    • "That one puff on that cigarette could be the one that causes your heart attack," said Surgeon General Regina Benjamin.
      • Red Sox work fast, get speedy Crawford for $142M Dec 09, 2021 12:23 AM

        • LAKE BUENA VISTA, Fla. - The Boston Red Sox struck again at the winter meetings, reaching agreement with star outfielder Carl Crawford on a $142 million, seven-year contract Wednesday night.
        • On Monday, the Red Sox formally announced their trade for slugging first baseman Adrian Gonzalez of San Diego.
        • Earlier in the day, both Chicago teams filled their needs at first base - Carlos Pena joined the Cubs, Paul Konerko returned to the White Sox.
          • WH warns tax defeat could trigger new recession Dec 08, 2021 11:24 PM

            • WASHINGTON - Raising the direst alarm yet, the Obama administration warned fellow Democrats on Wednesday that if they defeat the big tax-cut compromise detested by many liberals, they could jolt the nation back into recession.
            • President Barack Obama appealed anew for Congress to "get this done" and insisted that more congressional Democrats would climb aboard as they studied details of the $900 billion year-end measure.
            • One Democratic opponent, Rep. Barney Frank of Massachusetts, forecast a result that would abruptly reverse Congress' voting pattern of the first two years of Obama's term: "It will be passed by virtually all the Republicans and a minority of Democrats."
              • Dad of missing Ala. kids charged with murder Dec 08, 2021 11:18 PM

                • VANCLEAVE, Miss. - An Alabama man who told authorities he dumped his two dead children in the woods, then covered them with twigs, was charged Wednesday with two counts of murder after investigators found remains believed to be his 3-year-old son, police said.
                • Mobile Police Officer Chris Levy said the discovery of a boy's bones about 50 feet off a highway in rural Mississippi gave authorities enough evidence to file the murder charges against John DeBlase, who had been held for child abuse and corpse abuse.
                • Tests are pending to confirm the identity.
                  • Pena goes to Cubs, Konerko back to White Sox Dec 08, 2021 11:12 PM

                    • LAKE BUENA VISTA, Fla. - A few hours apart, both Chicago teams filled their needs at first base - Carlos Pena joined the Cubs, Paul Konerko returned to the White Sox.
                    • Another first, too, at the winter meetings on Wednesday: The New York Yankees made their initial offer to free agent Cliff Lee.
                    • The Yankees will try to lure Lee with a six-year proposal worth nearly $140 million.

                      More news


Advertisement

    Recent Estimates

AnalystFirm NameSymbolEPS Estimate
GEOXXXXX PAY$0.30
mrbilltraderXXXXX POT$1.59
XXXXXXXXXX OVTI$0.43
sam farahanXXXXX TECD$0.95
XXXXXXXXXX GSS$0.05
XXXXXXXXXX ABB$0.31
adfgafg ERTS($0.26)
XXXXXXXXXX SD$0.03
XXXXXXXXXX ATML$0.11
XXXXXXXXXX CBPO$0.32