Will the tax deal hold together? (Updated)
The White House is scrambling to keep the bipartisan tax agreement from unraveling. It has launched an aggressive effort to portray it as "a done deal" and is trying to cut off the haggling and press for a vote in the next few days.
On the GOP side, a staffer of a key Republican senator told me "we're in good shape." But that doesn't mean there aren't Republican objections. Sen. Jim DeMint (R-S.C.) is threatening a filibuster, though his reasoning is a bit odd. He objects that the plan "raises the death tax." But, in fact, it would make the estate tax rate 35 percent with a generous $5-million exclusion; without the deal the tax rate would go to 55 percent with only a $1 million exclusion. A plugged-in Republican on the Hill argues that DeMint's opposition "doesn't pass the laugh test" and points out that even with a Republican president and Republican Congress, "death tax" critics couldn't permanently wipe out the tax.
Certainly, some conservative Republicans might prefer a "clean bill," but the Republican bluntly told me that "if anyone thinks Obama is going to sign a standalone full extension of the '01 and '03 [tax cuts], they are out of their minds." Or, maybe they are just positioning to be the darlings of the most extreme elements of the base.
UPDATE (12:10 p.m.): Senator Jim DeMint's staff pushed back hard on my post earlier today, insisting DeMint is not really threatening to filibuster the bipartisan tax deal. Spokesman Wesley Denton emailed me, "Senator DeMint has simply stated he does not support the deal as currently structured as it includes huge new deficit spending and death tax hikes. Americans just voted in a historic election for Washington to stop the deficit spending that is mortgaging our children's future." He also defended DeMint's position on the death tax, arguing that "there is no question that raising the death tax from its current rate of zero to 35 percent is a large tax hike that will hurt family farms and small businesses and could destroy hundreds of thousands of jobs." The bottom line seems to be that DeMint will be "open to a temporary extension of all current tax rates without new deficit spending," but he won't give up pushing for the Bush tax rates to become permanent.
In short, DeMint isn't prepared to filibuster the deal, as news reports suggested. A final note: there are many reasons to oppose the estate tax, including the idea that this is "double taxation" on earnings. But to claim that it could destroy hundreds of thousands of jobs is, well, a stretch.
Meanwhile, a significant block of Democrats is coming to terms with reality. The Post reports:
Sen. Joe Lieberman (I-Conn.) called the tone of Wednesday's meeting "a little less emotional" than Tuesday's but cautioned that there's "still a lot of concern" among Senate Democrats, particularly on the issue of the renewable energy tax credit.
Still, Lieberman was optimistic about the chances that a bill will pass.
"I repeat, the votes are there; enough votes are there to pass this," he said, adding that the package will come up for a vote "maybe by the weekend."
Still, congressional Democrats are grousing every step of the way. Rep. Barney Frank (D.-Mass.) whined, "No, I won't vote for it. I don't think that I should be coerced." Huh? Is he talking about the White House or those hostage-taking Republicans? But Frank, too, concedes the bill will pass.
The votes will line up, because the alternative is a fiasco for the Democrats and the White House. Should his own party block his grand compromise, Obama would face the equivalent of a "no confidence" vote, ending whatever hopes he harbors of a political comeback in the last two years of his term. And let's play this out. If the deal doesn't pass now, a more conservative Congress returns in January and will certainly send Obama a bill the left will like even less. In short, the left is out of options. That explains why so many liberals are so angry.
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