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Divide over high-end tax cuts hints at stalemate for broader deal

By Sahil Kapur
Friday, December 10, 2010 16:04 EDT
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WASHINGTON – As the White House scrambles to pass a bipartisan tax deal through Congress, seemingly irresolvable issues between the House and Senate suggest the high-profile measure may wind up dead for the remainder of the year.

House Democrats on Thursday gave a vote no confidence in the deal President Barack Obama struck with the Republican leadership. Specifically, Democratic staffers say that the extension of the Bush tax cuts for the top 2-3 percent of income earners is a nonstarter in the House.

“If the current framework makes its way into a bill into the House, the Democratic caucus and Speaker Pelosi will not let it come up for a vote,” one House Democratic aide told Raw Story.

Pelosi said in a statement after Thursday’s vote that House Democrats are committed to passing middle class tax cut relief but argued that the “tax cut for the top 3 percent does not create jobs and increases the deficit.”

This poses an apparent stalemate for the Obama administration, because the high-end tax cuts are a top GOP priority, and Senate Republicans are likely to successfully filibuster a plan that excludes them.

“The House has already sent over a version of its tax cut plan to the Senate, where it’s also dead on arrival,” the aide added. “So, short of scrapping the plan and making a new one, this whole thing will probably get punted into the 112th Congress.”

The other provisions in the two-year package – which include extending middle class tax cuts, a 13-month extension of unemployment insurance, and a reduction in the payroll tax – are largely acceptable to lawmakers in both parties.

Administration officials are furiously working to save the deal, publicly touting its trove of benefits to the middle class and attempting behind the scenes to whip up votes in the Democratic caucus.

It remains possible that the Democratic leadership in the House will ultimately strike an accord with the White House and approve the package. But unless House Democrats or Senate Republicans blink, the issue could easily be pushed off into the next Congress.

Without passage and enactment of a deal this year, all Americans will revert to paying the higher Clinton-era tax rates starting January 1.

 
 
 
 
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