The Progress Report – A Taxing Decision
From The Progress Report:
President Obama’s $900 billion tax deal with congressional Republicans gained “a wave of new Democratic support” yesterday, signaling that the measure will make it through Congress, provided most Republicans support it. Senate Majority Leader Harry Reid (D-NV) said the Senate could vote on the package as soon as today or tomorrow, suggesting he is confident of its prospects in the upper chamber. Congressional Democrats have been largely displeased with the deal — which will extend for two years the Bush tax cuts for all income brackets, including the wealthiest two percent of Americans, in exchange for extending unemployment benefits and middle-class tax breaks — but many appear to be coming around. Democrats strongly objected to extending the bonus cuts for “millionaires and billionaires” because it will greatly increase the deficit while providing little stimulus for the economy or the middle class. A large number of Democrats had threatened to vote against the package, and, calling the deal an “absolute disaster,” Sen. Bernie Sanders (I-VT) has even threatened to filibuster it. But their most strenuous objection to the compromise was directed at the estate tax provision, which sets a 35 percent tax rate on estates worth more than $5 million. The White House has lobbied aggressively to win support for the deal in the last few days, sending Vice President Biden to Capitol Hill and other administration officials across Washington “to press their case.” And White House economic adviser Larry Summers delivered a grave warning to members of Congress yesterday, saying, “If they don’t pass this bill in the next couple of weeks, it would materially increase the risk the economy would stall out and we would have a double dip [recession].” But despite the fact that many in the party support the measure, and that the compromise appears poised to pass, some “Democrats in the House and Senate were still seething with anger — both about the substance of the deal…and the way they were iced out of the negotiations,” the New York Times reported yesterday. In a non-binding vote within the House Democratic caucus today, the caucus voted to reject the tax cut deal.