House Democrats rebel against Obama-GOP tax deal

WASHINGTON–In a surprising bit of brinksmanship, House Democrats moved Thursday to block consideration of the sweeping tax cut agreement brokered earlier this week by the White House and top congressional Republicans.

“There’s a strong desire among the members of the House of Representatives to put their own imprimatur on this very important piece of legislation,” said Rep. John Larson, D-1st District and chairman of the Democratic Caucus. “We are going to put together our improvements.”

The decision to forgo a House vote on the White House-GOP deal, a $900 billion proposal to temporarily extend all the Bush-era tax cuts, came during an emotional, drawn-out meeting of House Democrats in their basement caucus room in the Capitol on Thursday morning. During the lame-duck session, Democrats still control a majority in the House, which means they determine what bills come to the floor for a vote.

The tax cut agreement, hammered out between the White House and Senate Republicans, also includes a 13-month extension of unemployment benefits and a bevy of other tax breaks for individuals, families, and businesses

The proposal had already left Democrats, including those in the Connecticut congressional delegation, deeply divided. This latest move also revealed some fissures on strategy, not just substance.

The move to thwart the bill represents a remarkable confrontation between House Democrats and their erstwhile allies in the White House, President Barack Obama and Vice President Joe Biden, who served as a lead negotiator of the deal.

“He pretty much said take it or leave it,” said Rep. Peter DeFazio, D-Ore, describing Biden’s message to congressional Democrats. “Well, we’ve left it.”

“I think it’s important to go back to the table here,” said Rep. Chris Murphy, D-5th District. “I don’t know if there’s room for compromise but it certainly makes sense to make an attempt. There are some really bad deals in this.”

Murphy cited the estate tax provision in particular. “There is no argument that the estate tax fix in this bill stimulates the economy,” he said.

The estate tax is scheduled to rise on Jan. 1 to 55 percent for estates valued at more than $1 million. Under the White House deal, the estate tax would be set at 35 percent and apply only to estates valued at $5 million or more.

“That really sticks in my craw,” said Rep. Joseph Courtney, D-2nd District, echoing the complaints of many other lawmakers in the delegation. He pointed to a House-passed estate tax bill that would have set the levy at 45 percent and the exemption at $3.5 million.

The difference between that proposal and the current one, he said, is that it benefits only the wealthiest sliver of Americans-about 5,000 people. And the price tag? About $25 billion.

“It’s a really small group of people who would get a really huge benefit,” he said. “It’s almost unbearable.”

Courtney said there are other elements of the bill he likes, including the one-year 2 percent cut in payroll taxes, the child tax credit, and the expansion of unemployment benefits.

“The value of these, in terms of fairness and economic stimulus, is really good,” he said.

But he said he favored the move by House Democrats to put the brakes on the White House-GOP proposal and exercise some sway over the process.

Rep. Jim Himes, D-4th District, wasn’t so sure. Himes said he saw some advantage in trying to improve the package and strengthen the hand of House Speaker Nancy Pelosi in shaping the package.

But, as the clock ticks down on the lame-duck session, he’s worried about the end game.

“It’s not clear to me that we’ve got a lot of negotiating space,” said Himes, who has called the White House-GOP deal a “reasonable” package. “And at the end of the day, there’s a political catastrophe waiting if we get this wrong.”

“If these don’t get extended and the Republicans take over and do a package in January, that package will be less good than what we have seen now,” Himes continued. “And they will then say the Democrats raised everybody’s taxes, and we rode in our white horses and fixed it. That’s a political catastrophe.”

Asked about that scenario, Larson said: “That’s correct. I think everybody is certainly cognizant of that and everybody went into this with their eyes wide open. But I think also they’re very cognizant of the need to let people know what we stand for and there’s strong concern about being just a rubber stamp.”

“So that’s the sentiment that exists,” Larson added. “Now let’s see what we put together.”

He suggested Democrats would work through its tax writing committee, on which he sits, to come up with an alternative proposal that they would then put to a House vote. How quickly any such proposal could move through the House is uncertain, but Larson expressed confidence that there would be time to resolve the matter.

Courtney said he, too, was fairly certain they could come to an agreement. “On a scale of 1 to 10, I’m at 8,” he said.