White House Predicts Passage of Tax Cut Deal Despite Democratic Revolt

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."

Acknowledging 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."