Will House Democrats Torpedo Obama’s Tax Deal?

While it looks like the Obama Administration, along with Senate Democrats, appears to be close to a deal with Senate Republican over extension of the Bush tax cuts, House Democrats are signaling that they aren’t necessarily agreeing to anything:

While the public focus of the Great Tax Battle remains riveted on the U.S. Senate, top Democratic insiders are privately worried about the real lame-duck end game: a last-minute, potentially deal-breaking revolt by Democrats in the House.

That’s why Vice-President Joe Biden and White House Interim Chief of Staff Pete Rouse invited House Democratic Leaders to the VP’s mansion Saturday night for what turned out to be a two-hour meeting.

The existence of the meeting has been reported, but not the contents.

The topic, according to a source close to outgoing (but still in charge) House Speaker Nancy Pelosi, was how to cajole liberal Democrats in the lower chamber into accepting the results of the deal President Barack Obama and Senate Republicans are trying to cut.

The participants talked in detail of what elements should or should not be in a Senate package so that it can win the requisite vote in the House. And they discussed specific members and blocs — what they would need (in the bill or elsewhere) to be supportive.

The Senate-based deal is likely to include a two-year extension of Bush-era income tax cuts, even for the wealthiest families and a reauthorization of the existing program of jobless benefits so that some 2 million Americans don’t lose them at Christmas.

But the real question is: What else, if anything, are rank-and-file Democrats going to require support with the deal?

That is an urgent, but not necessarily cataclysmic matter in the Senate. If Obama strikes a deal with the GOP, he and they will need only 18 out of 58 Democratic senators to go along with it to ensure that the coalition has 60 votes to prevent a deal-killing filibuster.

(…)

The biggest problem — most seem to have forgotten — is in the House. Many seem to have forgotten that it is the House, which must originate tax bills, that last week voted by a 234-188 margin to limit the extension of the Bush tax cuts to families making less than $250,000 — Obama’s original campaign pledge.

Speaker-to-Be John Boehner denounced the vote as grandstanding “chicken crap,” but, being the legislative veteran that he is, he understood its procedural significance: It meant that whatever the Senate produces must come back to the House for another vote.

And that is where the real crisis could kick in for White House, which increasingly is in the position of fighting with its party base.

This would seem to be the main reason that the current deal includes both temporary extension of the tax cuts and another extension of unemployment benefits. One would expect that we’ll also see some pork added in there to bring in enough Democratic votes to get the 218+ needed in the House to get the deal through the lower chamber. Nonetheless, it’s worth remembering that this isn’t a done deal just quite yet.

FILED UNDER: Barack Obama, Congress, Politicians, Quick Takes, Taxes, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Pug says:

    Republicans who have been exulting about how easy Obama is to roll might get a big surprise when they find out he can’t tell Democrats in the House, or the Senate for that matter, how to vote on this “compromise”.

  2. Alex Knapp says:

    It’d be nice if they torpedoed it. The Bush tax cuts aren’t sustainable. But it won’t happen.

  3. Steve Plunk says:

    There are no tax cuts and there are enough Dem votes to sustain the current rates. A vocal minority seems to be lashing out as a last attempt to hold some power.

  4. Pug says:

    Having looked at this quickly, it looks like now there is a battle to see who can increase the deficit the most. The Republicans will still win with their tax cuts, but Obama is coming on strong with a payroll tax holiday, unemployment benefits extension (no offsetting cuts), college tax credits and other goodies.

    I thought the election was about our “children and grandchildren”. I guess the next election will be about “our children and grandchildren and their children and granchildren”. With the politicians we have, not to mention the citizens we have, the only things safe are the budget deficit and national debt.

  5. Steve Plunk says:

    Killing the economy with a tax hike will worsen the deficit. Keeping tax rates steady is reasonable and rational. Obama’s weak tea version of a payroll tax holiday will prove no more effective at stimulating the economy than the last stimulus package. He’s a day late and a dollar short on his proposal. As for the college tax credit we can expect the colleges to just raise tuition to match.

    The private sector economy must come first. So far all Obama seems interested in is the public sector. That’s where dollars go to die.

  6. Alex Knapp says:

    Steve,

    Killing the economy with a tax hike will worsen the deficit.

    What is your evidence that returning marginal rates to what they were 10 years ago will “kill the economy”?

    Obama’s weak tea version of a payroll tax holiday will prove no more effective at stimulating the economy than the last stimulus package.

    What evidence do you have that:

    (a) The previous package did not stimulate the economy and
    (b) A payroll tax holiday won’t stimulate the economy?

    As for the college tax credit we can expect the colleges to just raise tuition to match.

    I think that given the way tuitions have been increasing that you are correct on this point. It’s a bad idea.

    The private sector economy must come first.

    What evidence is there that letting the Bush tax cuts expire wouldn’t do that? Wouldn’t lowering deficits and, therefore, the debt provide financial stability and making savings and investment more likely?

    So far all Obama seems interested in is the public sector. That’s where dollars go to die.

    First of all, I should point out that since Obama took office, public sector employment has decreased significantly. Secondly, are you saying that ALL government spending hurts the economy?

  7. Pug says:

    He doesn’t need evidence. He has ideology.

    Part of that ideology is if Obama does it, it is bad.

  8. Alex says:

    I think it’s important to remember Obama did not create the economic crisis, and all the partisan finger pointing solves nothing. Compromise is necessary, and it does not show a weak character to look at the bigger picture.