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House Democrats Reject Obama's Tax-Cut Deal; Senate Set to Debate

3 years ago
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The Senate Thursday evening started a round of procedural votes in preparation for debate on a compromise package that includes an extension of the Bush-era tax cuts for all earners as well as benefits for the long-term unemployed. A vote could come as early as Saturday.

Despite a rejection of the deal by House Democrats, President Obama predicted the "framework" of the compromise would get through Congress. "Nobody – Democrat or Republican – wants to see people's paychecks smaller on January 1 because Congress didn't act," he said in an interview with NPR to be aired on Friday.

Meanwhile, the tax-cut debate is expected to be high on the agenda Friday afternoon when the president and Bill Clinton meet at the White House for a one-on-one discussion covering a range of issues, including the midterm elections and the Democrats' way forward in 2011.

Still furious over the compromise that Obama struck with Senate Republicans on the expiring Bush tax cuts, House Democrats voted Thursday not to take up the negotiated package and instead work to find a measure that they could support.

Although it was a nonbinding voice vote cast in a closed Democratic caucus meeting, the gesture was nonetheless designed to send a message to the president that House Democrats remain unhappy with the concessions he made in his efforts to avoid the expiration of the tax cuts at the end of the year.

"Democrats think the White House mismanaged this thing and gave away too much," said a senior Democratic aide familiar with the vote.

The caucus met Thursday morning away from the House floor to discuss its options in the face of a package that many Democrats are still against. Although many had hoped to modify the proposal before a House vote, Vice President Biden told the Democrats in a meeting Wednesday that the deal that had been struck with Republican leaders would not be changed.

Rep. Chris Van Hollen (D-Md.)But House Speaker Nancy Pelosi said Thursday that she and her caucus are still working to modify the deal and indicated that no vote has been scheduled. "We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote," she said after the caucus.

The tentative agreement that Obama announced Monday night would extend for two years the Bush tax cuts for all earners, while also continuing current tax rates on dividends and capital gains. In addition, the estate tax, which expired in 2009, would be temporarily set at 35 percent with a $5 million exemption, and extended unemployment benefits would continue for 13 months. Obama also said negotiators agreed to a one-year, 2-percentage point cut in the payroll tax for all workers.

Of all of the details in the package, the most galling to liberals seemed to be the compromise to extend the tax cuts for the highest earners, which many Democrats fought when the tax relief passed Congress in 2001 and 2003. They have railed against those reductions ever since. Democrats had also wanted to make permanent the tax cuts for middle- and lower-income workers. That was not included in the deal.

After the vote, Rep. Chris Van Hollen (D-Md.) spoke to reporters and explained the thinking. "This message today is very simple: That in the form that it was negotiated, it is not acceptable to the House Democratic caucus. It's as simple as that," said Van Hollen, a member of Pelosi's leadership team.

In another sign of unrest Thursday morning, Rep. Peter Welch (D-Vt.) announced that he had secured 53 signatures on a letter to Pelosi urging her not to bring the compromise up for a vote.

In the letter, Welch and his colleagues called the proposal "fiscally irresponsible" and "grossly unfair."

"America is wading into fiscal quicksand. Borrowing nearly a trillion dollars to finance tax cuts that disproportionately favor millionaires and billionaires threatens our ability to create jobs, grow the middle class and protect seniors," Welch said. "Digging the country deeper into debt to pay for misguided tax policy is irresponsible and simply doesn't make sense."
Tagged: Bush tax cuts

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wesxauto

Until we see the greedy goverment spend the next two years working on real spending cuts and getting a handle on waste and abuse of tax money noone should be taxed more for their defficiant use of our money. I would be glade to pay more tax if it was used wisley!

December 13 2010 at 11:32 AM Report abuse +3 rate up rate down Reply
Lorraine

From article published in "Heath Watch" Rep. Cantor: Popular parts of health law will be tackled in GOP repeal plan By Christina Wilkie - 11/30/10 08:31 AM ET House Republicans are looking to repeal the healthcare reform law and replace it with one of their own early next year without interrupting two popular parts the administration has already begun to implement. They include a mandate that bars discrimination of pre-existing conditions and a stipulation that allows young people to remain on their parents' insurance plans until age 26.

December 13 2010 at 4:47 AM Report abuse rate up rate down Reply
Clue

I cannot understand how livid the liberal get when they cannot raise someone's taxes. Why don't they just send their own money to Washington, if they think it will help? :o)

December 12 2010 at 2:16 PM Report abuse +5 rate up rate down Reply
allenduncan931

Ok I say we stop sending job out of the United State’s any company that does should have to pay twice the tax for taking job away from the United State. The pay for the United State's be set to a base pay for every one Corp. officer as well company making over 500k a year and it is from jobs done out side of the United States then that money should be taxed at 50 % on every dollar made. Then maybe these companies would bring these jobs back to the United States an we would have jobs we could pay our electric bills, bye food, and see Dr. I have a culinary and account background and I cant even get a dish washing job because of my age, I went from 60K a year to 0 used up all of savings unemployment ran out and I have sold off everything I can sell. In 1981 I dislocated my L3-4-5 in my back and in 2004 I was told they were deteriorating but I kept on going till the company I work for found a younger person to take my place at 24K a year. I fought and loss because big money was behind them. So is out system fair no is it what the founding fathers had in mine no So what can be done Nothing as long as people are not willing to give back as much as they take out. I hope everyone has a safe Holiday just be thankful you are still breathing that is the one thing they cant take away from you. ON the last note crime in our small town where nothing ever went on has had last week 4 daylight robberies 1 shooting killing 1 person 2 rapes, looks like we are going down hill fast but one thing is if these people get caught they will have a roof over there head and food in there belly. And taxes will go up even higher.

December 12 2010 at 9:39 AM Report abuse +4 rate up rate down Reply
1 reply to allenduncan931's comment
usivegas

Maybe if we didn't tax the businesses in this country to death they would not leave? Think about this, if we had lower taxes on businesses, they can employ more people and produce more lower cost goods that can be sold here, and abroad. Now each employee pays taxes each year so the government gets more revenue. Is this not better than having higher business taxes and less jobs where we are paying out more unemployment and collecting less taxes because of non- workers?

December 13 2010 at 3:44 PM Report abuse rate up rate down Reply
AB

The only reason these tax cut estensions would be good is becasue of the tax cuts to the middle class who will spend it in the economy. Giving money to people who already has loads of money simply don't make any sense at all. If the result is adding to the deficit and giving more money to the rich or letting all tax cuts expire and revert to rates under Clinton, I say let them expire. If people can't make it on the money they're making, they need to lower their standard of living to what they can afford. Just like we're telling the governmnet it should do.

December 11 2010 at 1:29 PM Report abuse +1 rate up rate down Reply
writewords2003

Does anybody in Washington really know what's going on with our economy? Our economy is on the skids, the real estate market is still floundering, the banking industry is tottering on the brink, our military endeavors are ineffective,the value of the dollar continues to slide, unemployment is at the highest level that it has been in decades,people are still losing their homes due to foreclosures and can't afford adequate Medical Care. May God help us.

December 10 2010 at 3:32 PM Report abuse +11 rate up rate down Reply
1 reply to writewords2003's comment
Kenneth

Also add to your comment. The peoples spending has almost come to a stop. From the reports black Friday was very weak and so was cibersource Monday.Unless something happens this holiday spending could be worse then last year.

December 10 2010 at 3:59 PM Report abuse +2 rate up rate down Reply
Rob & Kathy

Liberals have a peculiar point of view. Extending the current tax rates is a, "tax cut", but, letting them expire is not a tax increase...

December 10 2010 at 12:23 PM Report abuse +4 rate up rate down Reply
Robert & Lisa

The Demoncrats should reign in spending, not increase taxes.

December 10 2010 at 12:17 PM Report abuse +2 rate up rate down Reply
1 reply to Robert & Lisa's comment
BILL

Why don't you try it at home.....take away a portion of your income so that is what you made 5 yrs ago but prices are at 2011 levels and rising.... hmmmmm wait maybe it can work.... seniors and adult disabled r expected to do it on 125% of the poverty level maybe add them to endangered species list.....

December 16 2010 at 1:10 AM Report abuse +2 rate up rate down Reply
tyl843

Shame on Obama! Not only is he a traitor to his own party but to the rest of us middle class citizens. I'm one of those Independents who voted for him because we believed he would stand up for the good of this country and do away with unregulated wall street greed and big corporate lobbyists who's only interest was padding CEO's glutton ways. Obama caves in to the greedy Republican agenda that will cater to the less than 2% earners just to get a compromise? So, any time something is to be negotiated, everyone will have to give in to the republican agenda and they NEVER will compromise because the President will not fight but give in? Well, I'm no liberal democrat but a conservative Independent from the middle class who, along with alot of my colleagues WILL NOT VOTE FOR OBAMA EVER AGAIN-yep, ONE TERM PRESIDENT!

December 10 2010 at 7:33 AM Report abuse +6 rate up rate down Reply
1 reply to tyl843's comment
sharon

sorry cave what unemployment?I agree about restruction of taxes

December 12 2010 at 1:08 AM Report abuse +1 rate up rate down Reply
dfrancis1958

OBAMA can't have it both ways ... saying this deal needs to go through, OR we risk a double-dip recesson. Thought only GW Bush tried to ramings things thru using "SCARE TACTICS" ... & two years from now, during the Presidental Election, he's going to "FIGHT" to repal these tax cuts, for the wealthiest people? WHY should we beieve THAT? IF these tax cuts pass, unemployment start to decline over the next two years, how is he going to make any type of arguement abour letting the tax cuts expire, without the Reublicans making him look foolish? To bad he doesn't show the same passion, for extending unemployment beneifits, for the long term unemployed. As or he RPUBLICANS, IF they are willing to shut down EVERTHING until the get to vote for TAX CUTS FOR THE RICH, ... then keep the Senate in session unil 11;59 NEWS YEARS EVE, making them be there Christmas Eve, Chrismtas Day right up until the end of the year. Let them show the entire country they are willing to DO NOTHING, until they get their own way. REPUBLICANS complain about Unions, ... but they don't mind ORGANIZING & WORK STOPAGES to get their own way, but at least Unions are more PRODUCTIVE than these OVERPAID, USELESS wastes of tax payer money ... trying showing up for your job, & telling your boss your not going to do ANYTHIG, until you get our own way, & SEE HOW LONG YOU HAVE A JOB. IF Harry Reid & Obama can't figure out to keep these guys in session, until they get their work done, THEY ARE AS USELESS as the Republicans.

December 10 2010 at 7:19 AM Report abuse +5 rate up rate down Reply

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