Senate to Vote on Tax Cut Compromise Over Liberal Objections

Even with liberals and some conservatives still venting their anger over the tax cut compromise struck between President Obama and Republican leaders last week, the Senate will forge ahead with a make-or-break vote on the package Monday afternoon.

On the table will be the legislation that Senate Majority Leader Harry Reid released late Thursday night, a massive package of extensions, cuts and increases to 2010 tax rates. Leaders will need 60 votes to move to a final debate on the measure Monday.

As the president outlined last week, the bulk of the bill is dedicated to extending the expiring Bush tax cuts for all income levels for the next two years. Specifically, it will continue the 10 percent tax bracket and keep 25 percent, 28 percent, 33 percent and 35 percent at current levels, instead of reverting to 28 percent, 31 percent, 36 percent and 39.6 percent, respectively. It will also continue to tax capital gains and dividends at 0 percent and 15 percent, depending on income, instead of letting the rates go back to 10 percent and 20 percent for capital gains and marginal tax rates for dividends.

The legislation also temporarily cuts the 6.2 percent payroll tax for all workers to 4.2 percent and extends unemployment benefits for 13 months for Americans out of work up to 99 weeks. Most objectionable to liberal Democrats, the bill also sets the estate tax at 35 percent for estates valued at more than $5 million, well below the 45 percent rate on estates over $3.5 million that most Democrats had been pushing for.

In addition to the major planks of the agreement, the Reid bill also continues dozens of tax breaks and credits for people from the bottom of the income spectrum to the top. It patches the Alternative Minimum Tax for two years; extends the college tuition tax credit, child tax credit and Earned Income Tax Credit for two years; allows businesses to deduct 100 percent of certain investments in the first year; and provides a buffet of tax credits to businesses and industries from filmmakers to rum producers to coal miners and railroad operators.

The price tag for the two-year tax cut bonanza has been estimated at $900 billion, but the real cost to the president seems to be the support of liberal members of his own party, who have blasted the president for compromising with Senate Republicans and have vowed to change or even block the bill from being considered at all.

"I think the entire House of Representatives on the Democratic side has said we're not going for this deal," Rep. Anthony Weiner (D-N.Y.) said on NBC's "Meet the Press." "We're going to change this and hopefully the president's going to back us up as we try to take out the worst things that are in it."

Rep. Chris Van Hollen (D-Md.), who will soon be the top Democrat on the House Budget Committee, also said House Democrats aren't moving the bill until changes are made, particularly on the estate tax.

"There will be an opportunity for the House to work its will," Van Hollen said on "Fox News Sunday." "What form the bill takes as it comes to the floor is something that will be decided. People are looking at various alternatives."

Van Hollen and Weiner were both present on Thursday, when the House Democratic caucus took the rare step of voting not to take up the negotiated package until they find a way to make it a measure they can support.

Despite a clear message from Vice President Joe Biden to House Democrats that the compromise will not be changed, Speaker Nancy Pelosi defiantly indicated Thursday that she and her caucus are still working to modify the deal. She also said she had no immediate plans to bring the bill to the House floor until it's more palatable to her caucus.

But Rep. Paul Ryan (R-Wis.), the incoming chairman of the Budget Committee, said on "Fox News Sunday" that negotiations are over. "No. The answer is no," Ryan said of the Republican caucus. "The answer is no, we are not interested in changing this deal. We're interested in passing this through."

Speaking for the administration, senior White House adviser David Axelrod agreed that the time for deciding on the details of the compromise is over. "First of all, I'm not here to negotiate," he said on ABC's "This Week." "And, secondly, we have a framework, we have an agreement, and I don't anticipate that it's going to change greatly." But he added that he is optimistic that the package will pass Congress nonetheless, because it will benefit the economy and middle-income workers in the end. "I believe that there will be a coming together around it," he said.

The coming together does appear to have begun in the Senate, where a large block of moderate Democrats look like they will clear the way for Reid's bill Monday. But winning over House Democrats will be a tougher sell for Axelrod and the White House.

Whether or not they can pass it without House liberals' support remains to be seen. But as of Sunday, few progressives showed any interest in giving in to the president before the end of the year.

"I'm not a member of the tail-between-my-legs wing of the Democratic Party," Weiner said. "I believe we still fight for the things we care about."