The Obama administration worked furiously Thursday to cobble together an unusual coalition of Republicans and centrist Democrats in both
houses of Congress as its best bet to win enactment of its tax-cut deal.
Democratic liberals, who dominate the party, remained angry at extending
tax reductions for the wealthy. However, prospects that the administration's
strange-bedfellows coalition would prevail appeared good, but fragile.
"I'm afraid they do have the votes," said Rep. Barney Frank, D-Mass., a
veteran liberal.
One development that could make the White House's task easier would be
the support of House Speaker Nancy Pelosi, D-Calif., a champion of the liberal
bloc. She's been highly critical of the tax benefits for the wealthy, but she
hasn't yet said how she'll come down on the overall plan.
The administration is fighting to extend all Bush-era tax cuts for two
years, though President Barack Obama and Democratic liberals had wanted to
continue only the reductions for families that earn less than $250,000
annually. All the cuts expire Dec. 31.
The plan also would provide funding for extended jobless benefits, which
expired last week, for 13 months, cut payroll taxes from 6.2 percent to 4.2
percent for one year and impose an unusually low 35 percent tax on individual
estates of more than $5 million.
Democratic senators emerging from a lengthy meeting with administration
officials Wednesday suggested that some changes could be made to the plan, but
no major revisions appeared imminent. It wasn't clear what changes could be
made to mollify the liberals without losing GOP support.
The White House instead pressed hard for its compromise, touting its
economic benefits and announcing prominent new Democratic supporters such as
Charlotte, N.C., Mayor Anthony Foxx, Los Angeles Mayor Antonio Villaraigosa
and Sen. Jim Webb, D-Va.
It also dispatched Vice President Joe Biden to meet with angry Democrats
from the House of Representatives and its economic experts to huddle with
senators.
The still-unwritten legislation is expected to move first through the
Senate, where at least 39 of the 42 Republicans, independent Joe Lieberman of
Connecticut and at least seven moderate Democrats are viewed as sympathetic to
extending all the rates. Debate could begin as early as Thursday.
"The president has done what he had to do," said Senate Budget Committee
Chairman Kent Conrad, D-N.D. Webb called the package "the ultimate stimulus
plan."
White House economic adviser Larry Summers warned that if Congress fails
to pass the compromise, and the tax cuts expire and jobless benefits lapse, it
"would materially increase the risk that the economy would stall out and that
we would have a double-dip" recession.
Senate Democrats met with White House Budget Director Jacob Lew,
economic adviser Gene Sperling and others. Many senators were unconvinced,
though not adamantly opposed.
"While I'm inclined to vote no by what I saw yesterday (Tuesday), things
are in flux," said Sen. Tom Harkin, D-Iowa.
The administration's bigger challenge looms in the House. Though
Democrats control 255 of the 435 seats for about another month, the liberals
who dominate the caucus have been sharply critical.
"The Republicans successfully held unemployed Americans hostage to give
even more tax cuts to millionaires and billionaires. This plan is
irresponsible, and I will oppose it," said Rep. Betty McCollum, D-Minn., a
member of the Budget and Appropriations committees.
If all 179 House Republicans support the package -- still no certainty
-- 39 Democrats would need to join them to form a majority.
Fifty-four Democrats are part of the moderate House Blue Dog coalition,
whose members generally have backed extending all the cuts. But they've also
been the most fervent advocates of reducing the federal budget deficit, often
criticizing their own leadership for not doing enough about that. The
Obama-GOP deal would add more than $900 billion to the deficit over two years.
Many Blue Dogs are supporting the deal.
The jobless benefits and payroll tax cut "will go to people who really
need it," said Rep. Rick Boucher, D-Va. "I'm still concerned about the
deficit, but we're still trying to recover from a great economic crisis, and
we need the stimulus."
Some remained uncertain, trying to weigh the economic danger of
increasing the deficit against the benefits of its stimulus.
"I've got some serious problems with this because of the deficit," said
Rep. Bobby Bright, D-Ala. "There's no question, no matter how you try to
explain it, that this will add substantially to the deficit."
The administration's sales job would get a lot easier if Pelosi would go
along. Presumably, her support would bring along other party leaders and
provide at least a dozen more votes, while sending a strong signal to wavering
Democrats.
However, Democratic leaders face two problems. Their caucus members are
upset at the role their leaders played or didn't play in the negotiations, and
they're particularly unhappy about the estate tax.
"Members are really upset that there didn't seem to be more negotiation.
There's a real question about how much our leadership knew in advance and how
much they didn't know," said Rep. Dale Kildee, D-Mich., a 17-term House
veteran
The addition of the estate tax has a salt-in-the-wound feeling.
"The estate tax has nothing to do with compromise," said Rep. Bill
Pascrell, D-N.J.
