How did things get so bad so quickly?
After House Democrats took a voice vote against the tax-cut deal that President Obama brokered with congressional Republicans, White House officials and Democratic House leaders tried to play down the rebuke, pledging to continue negotiating until they got it right.
But the vote was ugly, a harbinger of what may be many more to come. After all, Thursday's caucus vote was taken only by members who will be returning in January -- not the current caucus, including 63 Democratic losers in the midterm elections. So this voice vote is the first full-throated roar of the smaller, more liberal Democratic caucus that will flank the president at the other end of Pennsylvania Avenue.
Attempts to bridge the divide have been hapless, at best. Vice President Joe Biden went to Capitol Hill on Wednesday for what was supposed to be an anxiety-releasing session; he appears instead to have made House Democrats even angrier by insisting that there was no room for compromise. The bill, he told the Democratic Caucus, had to be passed as is. So it’s not clear, exactly, what House members are being asked to do other than salute smartly.
Even Blue Dogs and "New Democrats" are divided on the still-unwritten bill (despite its many pro-business, centrist contours), and a growing contingent of conservative House Republicans are getting wobbly. Liberals are more unanimous in their contempt for the measure that would extend tax cuts for the wealthy.
Things have gotten so bad that both sides are even fighting over how they got to this place. For its part, the White House insists that this all could have been avoided had the House taken the whole tax-cut issue up before the election--and the Democratic drubbing. Robert Gibbs, the president’s spokesman, has said that the White House encouraged House and Senate Democrats to hold a vote on the middle-class tax cuts before the election.
That's not what members of Congress remember. Indeed, within the White House, presidential advisers were having the same debate as House leaders. The more-vulnerable Democrats in marginal districts were begging them not to nationalize the tax-cut issue, instead leaving these members to their own arguments. Liberals in safe seats were salivating over a contrast with Republicans: take a vote on the middle-class tax cuts alone, and let Republican defend their tax cuts for millionaires.
In the end, both the White House and the congressional leadership sided with their vulnerable incumbents.
Postelection, a more liberal caucus (the more conservative members having been defeated) and a similarly situated group of House leaders interpreted the November 2 election as a referendum of sorts on Obama’s caution. If he only would be stronger and take more chances, they have come to believe, and if he only had had more faith in the House, they wouldn’t have lost the chamber. Feeling ignored is one thing. But being ignored by the White House on something as basic as the Bush tax cuts proved to be too much.
With Obama’s encouragement, Biden opened up an informal negotiating channel with Senate Minority Leader Mitch McConnell, and the proposals came fast and furious. The Republicans had two bottom lines, or so it seemed: one was an extension of the tax cuts for high-income earners, and the other was a relatively large exemption for inheritances that would be hit by the estate tax. The White House had some leverage; Republicans really didn’t want the year to expire without a deal on taxes.
It was never clear, though, that Republicans would have the guts to block unemployment insurance. Rep. Peter DeFazio of Oregon, one of the most vocal House Democrats to oppose the tax plan, told ABC News on Thursday that “I personally believe the Republicans are bluffing on saying they’re going to kill off unemployment insurance for millions of Americans just before Christmas. And I would love to have that debate.” House Democrats just don't believe that the White House really won anything when Republicans agreed to a 13-month extension and a change in the formula that states use to calculate benefits.
On the Hill, Senate Democrats argue that the White House could have bludgeoned Republicans on the unemployment issue like they did on Wall Street reform, wearing down resistance and ensuring passage. But the White House counters that the political dynamics are different -- and the suffering of those who would be cut off from aid was more acute.
The plan’s suddenly most powerful selling point and probably most innovative policy dimension -- the 2-percentage-point cut in the payroll tax, which employees would notice immediately -- came up almost by accident. When Republicans participating in the more formal six-party talks said they didn’t want to extend Obama’s “Make Work Pay” tax cuts, White House adviser Gene Sperling countered with the more audacious proposal, one that he knew that many Republicans in the House had been interested in.
As with so many fights in Washington and around dinner tables, the sense of hurt comes from feeling exluded. House Democrats object to the way that the deal was introduced to them – through the press, without their input. To make it worse, the more they read about the architecture of the deal, the angrier they’ve become.
Told that Republicans wouldn’t compromise on the exemption level or the rate for the estate tax, House leaders think that White House negotiators simply lost their spine. House Democrats wanted inheritances taxed at 45 percent; the compromise calls for 35 percent -- a difference of only $24 billion over two years, but long an issue that has been at the bottom of Democratic arguments about income inequality and social justice.
There’s a more immediate issue: There is no bill. House members haven’t seen anything on paper. There is no Congressional Budget Office score, nor has the Joint Tax Committee weighed in. It’s not clear which of the “tax entenders” made it in, and which didn’t. It’s hard to fault House members for thinking that they’re just shadow-boxing until they see actual legislative language.
Still, the current thinking is that the Senate passes it without amendment, and the House receives it next week when the U.S. Chamber of Commerce and others, possibly the Business Roundtable and National Association of Manufacturers, weigh in.
If they're in favor, the pressure will be too great for the Blue Dogs, New Democrats, and wobbly Republicans to resist. But this is a strategy and a chalkboard play that lacks one key ingredient -- the football. The lack of a bill makes all of this theoretical.
At Thursday’s White House press conference, the Chicago Tribune’s Peter Nicholas might have asked the most prescient question to Gibbs, given the rising temperatures between the Hill and the White House. “If Obama has quit smoking, has anyone in the White House started?”
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