Unhappy Democrats say tax bill likely to pass as White House warns of possible recession
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, D-Mass., 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.
After the meeting with Biden, House Majority Leader Steny Hoyer, D-Md., said he still had reservations about the package, indicating he hopes changes are made before the Senate acts.
"We'll see what the Senate passes," Hoyer said.
Biden took a tough stance, warning that any changes might unravel the compromise plan, said several House Democrats who attended the meeting. "The vice president said, 'This is the deal, take it or leave it,'" said Rep. Henry Waxman, D-Calif.
The White House ballyhooed almost any elected Democrat who endorsed the tax plan, with no state or city too small to justify a press release. Vermont Gov. Jim Douglas and Charlotte, N.C., Mayor Anthony Foxx were among those praising the plan, the White House announced.
But many House Democrats were unmoved. They particularly criticized Obama's proposed estate tax rates, which are far more generous than most Democrats had expected.
The concession seemed gratuitous, said Rep. David Price, D-N.C. For now, he said, "there's a mood to resist" the overall package.
Passage of Obama's plan seems more assured in the Senate, where numerous Democrats have agreed that the president had little choice in making the compromises with Republicans. Still, Majority Leader Harry Reid, D-Nev., said he and colleagues are considering possible changes, and action could come within days.
Changes designed to ease some Democrats' concerns might include a provision for bonds to help state and local governments pay for construction projects, tax breaks for wind power and clean-energy subsidies, lawmakers said.
Source: AP News
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