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Posted at 8:30 AM ET, 12/ 9/2010

Will the tax deal hold together? (Updated)

By Jennifer Rubin

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.

By Jennifer Rubin  | December 9, 2010; 8:30 AM ET
Categories:  Senate Democrats, Taxes, economy  
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Next: Liberals' sense of betrayal shouldn't surprise

Comments

Perhaps the House vote on the CR that includes the Senate version of the Food Safety Act is the greater hurdle that will run down the clock on Obama's Grand Old Bargain (GOB) on the Bush43 tax cuts. With Larry Summers popping up to claim failure to pass the latter quickly will lead to a double-dip recession, one wonders who is really talking and who is really listening.

My bet is Pelosi will push for the CR and ignore the GOB. After all, she still has a job for two more years.

Posted by: K2K2 | December 9, 2010 10:06 AM | Report abuse

My guess is that we will replay this in January. A new less compromised bill will pass in the house,and will get bogged down in the Senate,because only 59 votes will be for the permanent continuation of the Bush tax cuts. No Bill will ever get to Obama's desk,and,that may be the strategy all along,a sneaky deal between Obama and the progressives to become the party of No,and do to the Republicans in 2010-2012 what was done to them 2008-2010. The Wealthy will not be forgiving of the Republicans if they fail to get the tax cuts passed.

Posted by: rcaruth | December 9, 2010 10:40 AM | Report abuse

"Or, maybe they are just positioning to be the darlings of the most extreme elements of the base."

As opposed to the rest of the principled politicians of both parties who are going along with this crapsandwich of a bill that continues the status quo on taxes (except for the increase in death taxes) and adds about a trillion dollars in unfunded spending.

And businesses, who plan long term, face the further uncertainty of tax increases in 2 years, an issue that will surely be the signature platform issue of the incumbent President.

But no worries. As you see it, it's those evil pols "positioning" themselves we have to watch. Just trust the get-along guys, they'll take care of us. Don't they always?

Posted by: jcp370 | December 9, 2010 10:46 AM | Report abuse

Rubin, I'll savor the moments your insightful comments are allowed here. I am certain that such commentary will not long be accepted by your bosses. The risks of offending the ruling class far outweigh the risks of speaking for a conservative voice.

Posted by: NelsonMuntz | December 9, 2010 11:18 AM | Report abuse

Defying President Obama, House Democrats vote not to bring up tax deal he negotiated with GOP in its current form.

http://www.cnn.com/

Posted by: Claire11 | December 9, 2010 11:41 AM | Report abuse

Defying President Obama, House Democrats vote not to bring up tax deal he negotiated with GOP in its current form.
http://www.cnn.com/
Posted by: Claire11

Curiouser and Curiouser,things are bubbling. I hope that Jennifer and the Righties get that their contempt for Obama is a two edged sword politically,because they are getting something they want from Obama,but they have made him to be too weak to deliver it/it's a pyrrhic victory.

Posted by: rcaruth | December 9, 2010 11:51 AM | Report abuse

Thanks God I was not alone to oppose Obama's timid compromise with the Tea Party Hawks on Tax issue.
We all democrats want that there can not be any tax cut to any one making more than $250k unless economy really improve. Worst come to worst, let taxes increase on all and let Republican majority face the situation in 2011. Why to worry about their fate?
Oh do not worry too much about the scare tactic of the White House that if it is not passed, there will be double digit recession!!! Bush and Reagan used to say the same thing. The economic charts showing all around improvement so do not worry about recession and un-employment. We do not want new deficit of 700 billion dollar at any cost.

Posted by: citysoilverizonnet | December 9, 2010 1:59 PM | Report abuse

But the death tax so to speak has only been at 0 for literally one year. So were all these hundreds of thousands of people who are going to lose their jobs just hired in the last year? If not, they were hired when the estate tax was at a much higher level. So why would they lose their jobs now?

This is why you have to disregard all the really ridiculously nonsensical statements that come out of the offices of any Congressman.

Wesley Denton, you're a dope and unfortunately for you most of the readers of this column are not!

Posted by: 54465446 | December 9, 2010 4:14 PM | Report abuse

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