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White House Predicts Passage of Tax Cut Deal Despite Democratic Revolt

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Senior White House adviser David Axelrod predicted Sunday that despite a revolt by Democrats against the tax cut deal reached between the White House and Senate Republicans, the measure to extend the Bush-era cuts for all Americans, including high-income earners, will be approved by Congress.

While the House Democratic caucus cast a nonbinding voice vote on Thursday to oppose the agreement, which would extend the tax cuts for two years and extend unemployment benefits, the Senate has scheduled a procedural vote for Monday evening on the tax cut package as a first step toward passage.

"I think the Senate is going to take this bill up tomorrow, and we believe that when it comes back to the House, that we will get a vote, and that we'll prevail there, because at the end of the day, no one wants to see taxes go up on 150 million Americans on January 1st," Axelrod said on CNN's "State of the Union." "No one wants to see 2 million people lose their unemployment insurance, and everybody understands what it would mean for the economy if we don't get this done."

David AxelrodAcknowledging the unhappiness of fellow Democrats, Axelrod said: "Understand that this is a compromise. There are elements of this plan that we didn't particularly like. We didn't particularly like even temporarily extending these high-end tax cuts, which cost money that we could apply to our deficit. We didn't particularly like the treatment of the estate tax for wealthy estates, but compromise by its very nature includes things that you don't necessarily like."

He said it was "egregious" for the Republicans to have insisted on extending the cuts for the wealthy as well as the middle-class.

Asked on ABC's "This Week" if House Democrats had a right to feel blindsided by the deal that the White House negotiated with the Republicans, Axelrod said: "These discussions came together very quickly. They were prompted by the looming deadline. We felt a sense of urgency. ... It just accelerated very quickly, and we felt that we had to seize the moment, because if we didn't, the American people would pay the price."

Axelrod added, "We handled it as best as we could given the time frame that we had." He also appeared on CBS' "Face the Nation," where his message was the same.

As to Monday's vote, the Senate Democratic whip, Dick Durbin of Illinois, said on CNN: "I can say that we have a good cross-section of the Senate Democratic Caucus, from left to right, who are prepared to accept this."

Obama has paid a political price, at least for now, for the agreement. A new McClatchy/Marist Institute poll conducted Dec. 2-8 found that a drop in support among Democrats and liberals since last month had put Obama's job approval rating at its lowest point yet.

Rep. Chris Van Hollen, an influential Democrat from Maryland, said on "Fox News Sunday" that despite the unrest among party members in the House, "I am confident that when we get to January there will be no tax increases on middle-income Americans and ... that portion of the president's deal with respect to the top rate earners will also be part of the deal."

But he said one of the real sticking points for Democrats was that the White House agreed to a deal on the estate tax that was too generous to the wealthy. The levy, which Republicans have branded a "death tax," had lapsed entirely this year but was scheduled to return Jan. 1. The Obama-Republican tax deal would set an estate tax exemption of $5 million per person, and a maximum rate of 35 percent, for two years. Democrats had wanted to restore the tax at its 2009 levels, with a $3.5 million exemption and a 45 percent top rate.

"Most of us understand we gotta make some tough compromises," Van Hollen said. "Most of us agree with almost all of what the president negotiated. There is one thing that just was the choking point, and that deals with the estate tax break. ... That doesn't help the economy. It hurts the deficit. And most importantly, you know, the Republicans did not insist on the estate tax being part of the central portion of this deal."

On the same program, Republican Rep. Paul Ryan, who is slated to head the House Budget Committee in the new Congress, said of the estate tax: "We're at zero and then we're going to go to a 35 percent tax rate. That's not enough for Chris and other House Democrats and they're willing to scuttle the entire agreement, an agreement which has bipartisan support in the Senate, an agreement with the president of the United States to get this moving and prevent tax increases from hitting our economy, which would be very destabilizing, very volatile, in January."

However, while Van Hollen said that Democrats want to try to change this part of the deal: "We're not talking about blocking the whole thing for that purpose. What we're saying is we need to put this question to the test."

Van Hollen's criticism of the estate tax part of the deal was echoed on CNN by Rep. Elijah Cummings, a seven-term Democrat from Maryland, who said Republicans had told him that they "never expected to get the estate tax." He said further evidence that the White House had made a bad deal was that GOP lawmakers had also told him they "would not have left here not doing [the] unemployment" extension Obama sought and that they were happy to avoid a fight over the Democrats' push to cap the tax cut extension to those earning less than $250,000 a year.

Rep. Jerrold Nadler of New York likened the Republicans to "gangsters" who had used the desire of Democrats to extend tax cuts for the middle class as "blackmail."

"They're really saying, like a bunch of gangsters, that's a nice middle-class tax cut you got over there; pity if something would happen to it; and unless you give the millionaires and the billionaires a long-term tax cut, we're not going to permit the middle class to get ... its tax cut," Nadler said on CBS' "Face the Nation."

"But if we succumb to that blackmail now, when both the middle-class and the upper-end tax cuts expire in two years in the middle of a presidential election, why would I expect that the president and the Congress would then have the political gumption not to submit again to the Republican blackmail and in effect permanentize this?" Nadler said.

Durbin, who served seven terms in the House before being elected to the Senate, said he felt the House Democrats' pain.

"They really have sacrificed for this president," he said. "They've gone out on a limb, and even more than the Senate, they've shown loyalty to his agenda and paid a dear price for it in the last election. And now, the one defining issue, the real difference between Democrats and Republicans in terms of economic justice, it appears this agreement doesn't honor what we think are the true values and principles of our party."

Interviewed on NBC's "Meet the Press," Mayor Michael Bloomberg of New York, who last week delivered a blistering speech attacking both parties for political posturing rather than seeking solutions, praised the tax agreement as a necessary compromise and said Obama should tell disgruntled Democrats: "This is the best I can do. Suck it up and let's get on together."

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Charlie

TAX CUTS do not motivate businesses to hire more employees. DEMAND FOR PRODUCT motivates businesses to hire more employees. Increase the money in the hands of the lower and middle classes (and help them find their way out of their debt burden) you'll increase demand for product, which will increase employment. Increase the money in the hands of the rich, you will NOT motivate them to hire employees. WHY should a rich person who got a tax break hire manufacturing employees to make products nobody can afford to buy, or hire cashiers to work in empty stores? Employers hire cashiers because THERE ARE LONG LINES IN THE STORES. Employers hire manufacturing because THEY CAN'T PRODUCE ENOUGH PRODUCT TO KEEP UP WITH DEMAND. Employers do NOT hire employees because they got a tax break.

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

Do people not understand that Congress was controlled by the Dems for the last 2 yrs of the Bush administration and they have been in control for the 2 yrs of the Obama admin. So 4 yrs and what have they done? They insured in 2006 that all people should own a home (whether they could afford it or not) and then mortgages came due and they couldn't pay. The taxpayer had to bail out the banks who lent to these people. And now here we are talking about Bush tax cuts--these aren't cuts in taxes--it's just not raising our taxes if the bill is passed. Although we will be forced to pay for all the earmarks these politicians are lining up to attach to it--you know like rum subsidies to the Virgin Islands, or Ethanol subsidies (we need the corn for food production) not for biofuel. When does the madness end? Middle class people don't hire us, wealthy people do.

December 13 2010 at 5:01 AM Report abuse -3 rate up rate down Reply
3 replies to okitori's comment
mosess81

May I remind us all that capitalism is a context created and protected by each and every american citizen. Without all our support of this system we would all be in a much worse place. I am troubled when I hear the supporters of tax cuts for the rich talking about "it's their money", "They have worked hard and they should be afforded the same breaks as everyone else". I wantto remind us thatno richj person in this country is a self made richj person. It is all our protection of the capitalistic machine that has created an environment for those riches. If you make above avergae amounts of money through your participation in this syste., you are obligated to pay much more back into it as it is because of us al that you were able to gain riches in the first place. If thatis not the case then let the rich go live in china. Immediately they will find that without the cumulative protection of us all, their riches would all belong to the government and notjustthe small percentages we are requiring. Pay it forward!

December 12 2010 at 7:39 PM Report abuse +1 rate up rate down Reply
1 reply to mosess81's comment
vicbar88

That is one of the most ridiculous things I have ever heard - The right thing to do is give everyone the same tax rate across the board and everyone the same tax breaks across the board. When you start discriminating against one group in favor of another you set everyone up for trouble. What incentive would people have for becoming successful or to start businesses and make jobs. Why wouldn't they take their companies to places where they are not discriminated against and where they can make the most profit? After all isn't that the whole point of having a business? It surely isn't their obligation or responsibility to make sure that everyone lives comfortably.

December 13 2010 at 7:24 AM Report abuse -1 rate up rate down Reply
higgdj7

I hope the Speaker doesn't let it come to a vote! Draw a line in the sand and let ALL taxes go up. Re write the TAX CODE for all Americans instead.

December 12 2010 at 7:33 PM Report abuse +1 rate up rate down Reply
Mister C.

Sorry Mr. President, the Senate and others let you/us down.

December 12 2010 at 7:32 PM Report abuse rate up rate down Reply
Mister C.

Our system of checks and balances is in whose best interest again? Comprise at its political best. It make the President look bad about something he doesn't agree with and opposed. However the majority has it and the Minorities are forced to accept it. It continues to feed the wealthy for a while longer and makes you (Americans) accept it and pay for it, blame the President right? Wrong.. the rich $250 and up want to continue to ride what the Last president or (checks and balance system) created. Interesting how the system works. Well enjoy, YOU elected these people so it must have been what you wanted. I agree with Michael Bloomberg mayor NYC when he was stated in short, both parties are responsible for what they are giving the American people, suck it up and get on with it. Nickels and Dimes couldn't have said it better. In the best interest of who again? Americans don't know what is best for them ... mind you the Republican Senate some democrats (our system of checks and balances) feels this way. This is JUST what you got ride of (administration wise) and recently elected back. I love my country! I've served my country! Raised a family in my country! I retired after 20 years of work in my country! I feed my country! I pay taxes to my country! I vote in my country! and this is what I get, think I don't know better? My choices are doing just what I want them to, watch my back as best they can!

December 12 2010 at 7:25 PM Report abuse -1 rate up rate down Reply
mamatiger919

The Democrats should let the tax bill drop. The Republicans will take office in January. They supposedly are in tune to the American people. Let them decide where to cut and where to spend. The country should see whose this party really supports. The Democrats should use their majority rule and vote for an unemployment extension if they can and if the Republicans want to hold it hostage then so be it.

December 12 2010 at 7:20 PM Report abuse +3 rate up rate down Reply
paretree

President Obama did a great thing for the nation and for all the people---especially the ones out of work.-I f one spends the time to really look at the agreement, one can see the few millions of out-of workers will have relief. and even tho the super rich get more (after ten years of it) tax relief it is a wise thing Obama has done. We are a nation--- not a small group or team of people-------he has done a great ,smart thing for us all--as hard to take as it may seem. MERRY CHRISTMAS--& a HAPPY NEW YEAR.-----------------

December 12 2010 at 7:08 PM Report abuse -1 rate up rate down Reply
tnickerson08

The media and the democrats were calling for "compromise" after the November elections, although where was the "compromise" for the last two years? Now they make a deal and don't want to live up to it, unless they are PAID OFF. The Republicans should tell obama to forget it; a deal is a deal, take it or leave it. Since the democrats and the media have been claiming that the economy is turning around there should be no need to extend unemployment; should there?

December 12 2010 at 6:45 PM Report abuse +3 rate up rate down Reply
1 reply to tnickerson08's comment
mosess81

compromise with whom. The republicans made no viable contributions to anydiscussion. You cant compromise with a wall.

December 12 2010 at 7:30 PM Report abuse rate up rate down Reply
dc walker

Tax changes should be for those who make $50 million a year, those below this figure have businesses and have a payroll to meet. Next abolish the income tax for anyone making under $100,000. Fix the tariff schedules to eight per cent across the board. From 2000 to 2008 we collected $198,910,976 in tariffs. We lost $4,319,473,520 in tariffs assessed but not collected due to the trade deals. Call it a war tax of eight per cent. A tariff tax on foreign goods that will pay off the cost of two wars.

December 12 2010 at 6:42 PM Report abuse -4 rate up rate down Reply
1 reply to dc walker's comment
higgdj7

I'm not savvy with all the business tax code but this everyone knows, there are "Perks" that very few get and in a manner of speaking, subsidized by the "Taxpayer." How else would John Boehner be a near scratch golfer? I'm just say Bechtel "Ain't No Small Business." I agree with everything you said except...$50 million is too high a figure to start.

December 12 2010 at 8:07 PM Report abuse +4 rate up rate down Reply

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