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House Dems Want to Send Negotiators Back to the Table House Dems Want to Send Negotiators Back to the Table

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TAXES

House Dems Want to Send Negotiators Back to the Table

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Rep. Sander Levin, D-Mich.(Win McNamee/Getty Images)

Following their Caucus voice-vote today not to take up the White House-backed tax-cut deal, House Democrats say the ball is in their court.

 “We’re going to have a meeting of Ways and Means Democrats on Monday or Tuesday … to review where we are. Because I think clearly very much the ball is in the House, and the Ways and Means Committee,” said the panel’s chairman, Rep. Sander Levin, D-Mich.

 

But whether today’s action by House Democrats – described by many members as nearly unanimous, although openly held voice votes can obscure opposition that chooses silence  -- proves to be more symbolic than realistic will play out in upcoming days.

“Shot across the bow? OK. So now we’ve made it. Now what are we going to do?” said Rep. Shelley Berkley, D-Nev., the only Democrat to say she supported the president’s deal. Rep. Jared Polis, D-Colo., also did speak out, but only to ask for a point of order to allow an explanation of what the resolution would mean. He eventually did not voice opposition to it.

The Senate, meanwhile, is moving ahead with a likely Saturday vote on the tax package with it unclear whether any changes will be made to the deal.

 

“We hope that we can very quickly lay down the tax bill,” Senate Majority Leader Harry Reid, D-Nev., said this afternoon. To avoiding violating a constitutional requirement that the House act first on tax bills, the Senate is planning to use a middle-class only tax cut bill as a shell bill into which the White House’s tax deal will be inserted.

Reid said he wanted to give senators time to review the bill to “make sure people don’t feel like they’re being jammed.” A Saturday vote might give enough time for review while also running the clock after a cloture filing on the bill, which is necessary due to a likely filibuster by Sen. Bernie Sanders, I-Vt.

The measure is widely expected to pass the Senate.

Reid did not say if the bill would differ meaningfully from the package outlined by the White House.

 

But Senate Minority Leader Mitch McConnell, R-Ky., sought Reid’s concurrence it would not in a floor exchange. “It’s my understanding it’s complete and ready and actually we could move to it in the next hour or so,” McConnell said around noon.

Meanwhile House leaders could not – or would not – say exactly what their response would be if the Senate proceeded, only that the resolution passed today underscores they are unwilling to vote on the package unless significant changes are made to some of its key components. One of their primary demands is that the issue of tax-rate cuts for middle-income taxpayers be “decoupled” from those for the wealthiest Americans.

The resolution stated: “The Democratic Caucus resolves that in its present form, the tax package should not come to the floor of the House.”

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By rejecting the proposal, many House Democrats are calculating that they still have time to push for what they would consider a better compromise on the Bush tax cuts -- in particular, a deal that doesn’t eliminate the estate tax for all but a few thousand of the nation’s richest families.

Essentially, House Democrats want an opportunity to vote separately on those tax rates, hoping that they can pass the middle-income cuts and kill those for higher brackets. Rep. Peter DeFazio, D-Ore., who introduced the resolution, said the vote was intended to instruct the House leadership to tell the Senate and the White House to go back to the table. “We have tremendous concerns about what was given away by the White House to Mitch McConnell in the Senate,” DeFazio said.

Speaker Nancy Pelosi, D-Calif., was not opposed to the resolution.

House Democrats also said they were upset that Rep. Chris Van Hollen of Maryland was supposed to be their negotiator on any deal, but seemed to be left out of the process.

“The House was not consulted during the negotiations that produced this package, and our support cannot be taken for granted now or in the future,” said Rep. Raúl Grijalva of Arizona, co-chair of the Congressional Progressive Caucus. “Slashing taxes for the wealthiest two percent during a major recession is simply unreasonable, and the hardworking American people deserve a better deal.”

So jarring was the caucus’s action that a House Republican aide made his own way over to reporters outside the Democratic meeting to give a response.

“President Obama has said failing to stop all of the tax hikes scheduled for January 1 will have serious consequences on the economy. House Republicans agree,” said Michael Steel, a spokesman for incoming Speaker John Boehner, R-Ohio.

Although Obama and Republican leaders have stressed the need to settle the issue before the end of this year because all of the tax cuts will expire on January 1, lawmakers in both parties know that they could actually punt on the issue until early next year because most people don’t actually pay their 2011 taxes until 2012.

But in practice, that gambit would pose serious risks. Absent some kind of special exemption, employers would be required to start withholding income taxes from paychecks at the higher tax rates as soon as 2011 begins. Indeed, the Internal Revenue Service has already warned that it might not be able to update its own systems by January 1 if Congress doesn’t act soon.

This article appears in the December 9, 2010 edition of National Journal Daily PM Update.

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