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Senate to Vote on Tax Cut Compromise Over Liberal Objections

3 years ago
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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."
Filed Under: The Capitolist

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Tina McCaffrey

I USE ALL CAPS FOR SPEED. I will now express myself quietly. I feel a Nation is like a family, we love each other yet we respect our differences. it seems to me that our supposed leaders would rather runs our nation into a worse economy than cooperate with the legally elected president. So, there you are you took 8 years to break our country and because you are poor sports and safe in your financial state that you are willing to tax an unearned tax cut when you have all the money and we can go to a worse depression because you want to blame it on Mr. Obama. As a working class person and a small business owner, broke because all my personal funds are in the business. You expect to get your tax cut for braking our economy. Thanks for your service.

December 14 2010 at 5:24 PM Report abuse rate up rate down Reply
Anna

President Obama has abandoned his principles for a pitiful "compromise" that (a) gives more money to a very few, VERY rich people, (b) hurts the future of Social Security and (c) increases the deficit and the debt. In order to look as if he has gotten something done, he has done more harm than the Republicans could have done alone. When Wall Street executives are looking at $144 billion in bonuses this year, how can it be that Obama gave in so easily? I was a supporter of his, volunteered and voted for him. He turned out to be a Republican in disguise. Now if the Democrats in Congress also cave in, it will mean that the non-wealthy have nowhere to turn in this government. I only hope that somehow Senator Sanders, Senator Brown, and others like them will be able to stall this disastrous measure the way that Republicans have stopped things like unemployment insurance and DADT. If nothing else, I hope that no one will ever again seriously doubt that the Republicans are the party of the super-rich. Will all the real Democrats please stand up?

December 13 2010 at 5:51 PM Report abuse rate up rate down Reply
pbugay

If this tax cut is going to cost 900 billion, then the 2011 democratic budget was planning on eliminating all bush tax cuts and increasing everyone taxes. Why isn't anyone talking about this. "Taxes are not being cut they are remaining the same" What tax rates were in the 2011 budget?

December 13 2010 at 4:51 PM Report abuse rate up rate down Reply
dadsadem

The Republicans claim that we never raise taxes in a recession. They never give any facts to justify that claim on why not. The Democrats use CBO estimates and other facts to only support only extending the tax breaks for the middle-class. It should be a easy decision to only extend the breaks for the middle-class but the Republicans have to repay their rich supporters for getting them elected.

December 13 2010 at 4:24 PM Report abuse rate up rate down Reply
rusty2old

Weiner and Reid have that puss and expression on their faces you'd just love to slap. Talk about an arrogant piece of crap Weiner answers questions with his own questions and then looks away in disgust when asked to "Just answer the question I asked." New York has Silver, Weiner and Shumer, the real Three Stooges.

December 13 2010 at 4:15 PM Report abuse +1 rate up rate down Reply
bskadowski

Representative democracy was broken by the information age. Without smoke-filled rooms to break election promises in, our two parties have no wiggle room anymore to manoever to a reasonable compromise unchallenged by their constituencies as misinformed by both ends of the Press.

December 13 2010 at 4:09 PM Report abuse rate up rate down Reply
dadsadem

John McCain is a good example of what is wrong with this country. He rants and raves on the floor of the Senate today about what is wrong with this bill but says he will vote for it. It a Senator thinks it is wrong for the country he should vote against it instead of voting with his party. Both Democrats and Republicans do the same thing. Its not about the country it is about the Party.

December 13 2010 at 4:01 PM Report abuse rate up rate down Reply
spirit33904

Lets face it, the rich find every loophole they can to reduce their taxes and so much is done under the table so to speak, it is not even reported. Dishonesty is a common practice. Look how many rich are charged with tax evasion and have not paid for years. I remember the days when the milkman had the most trouble getting paid by the rich! You can tell I am a senior! I am not against wealth, some of our wealthiest are doing great works. But the cheaters are doing great harm.

December 13 2010 at 3:59 PM Report abuse +1 rate up rate down Reply
marketing2020

The so called Bush tax cuts have been in effect for nearly 10 years. Yet politicians, talking heads and even some economists talk about maintaining the Bush tax rates as as if NOT RAISING TAXES IS A TAX CUT. (Granted, it would have been 10 years ago.) What am I missing here? Maybe we should have another INCREMENTAL tax cut to spur spending, production, and jobs.

December 13 2010 at 3:58 PM Report abuse rate up rate down Reply
truthforfreedom

Now President Obama’s tax deal is an actual bill. And Harry Reid included even more spending in order to buy off votes to support it. To prevent a massive income tax increase, Members of Congress now are being asked to vote for ethanol subsidies, mass transit tax deductions, energy efficient appliance subsidies, and cash subsidies for alternative electricity generating corporations. All this in addition to tens of billions plus in unemployment compensation and a return of the death tax. Watch out people, this is not good. We have been duped, once again by Democrats. The Republicans only got their extension of Bush Taxes, that's it. Harry Reid stuck it to them again.

December 13 2010 at 3:55 PM Report abuse rate up rate down Reply

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