Obama enlists help in tax-cut debate
President Obama took the unusual step Friday of turning to a Democratic predecessor, Bill Clinton, to help rescue the tax cut compromise plan, as conservative Republicans began to join a widening opposition that includes criticism from the president’s own party.
Clinton appeared with Obama in the White House briefing room to endorse the deal, in the latest twist of the lurching debate that has consumed Washington. It was the first such appearance by the former president during Obama’s presidency.
FOR THE RECORD: An article in the Dec. 10 Section A about President Obama enlisting the support of former President Clinton for his tax-cut package said the plan would result in a 2% reduction in the Social Security payroll tax. It would be a drop of 2 percentage points, reducing withholding from 6.2% to 4.2%.
The two men entered the briefing room smiling, with Obama referring to Clinton as “the other guy,” before they spoke seriously. After a few minutes, Obama left to attend a holiday party and Clinton took questions on his own for some time, a flashback moment, with the White House placard over his shoulder.
“I don’t believe there’s a better deal out there,” Clinton said of the tax cut compromise. Democrats will have less bargaining power if they wait until the Republican-controlled House convenes in January, he added.
The measure, which mixes an uneasy blend of liberal and conservative objectives, threatens to upend year-end Democratic priorities before the party surrenders control of the House after last month’s GOP midterm election rout.
The GOP has made good on its threat to block any action in the Senate until Congress acts to prevent tax cuts from expiring Dec. 31. As a result, Democratic leaders have been forced into off-balance maneuvers and last-ditch efforts to reach their goals in the tumultuous lame-duck congressional session.
One such move this week left a doubtful future for the repeal of the controversial “don’t ask, don’t tell” policy banning gays from serving openly in the military. Senate Majority Leader Harry Reid of Nevada believed he had the 60 Senate votes Democrats needed to pass the repeal, which was contained in a complicated military spending bill. Reid abruptly called a vote Thursday night in the midst of negotiations over the measure, and it was defeated.
That move baffled and infuriated supporters of repeal, who blamed Reid for forcing a vote at the wrong time. But Reid’s allies later explained the move as an effort to force the issue into the open because talks were dragging and time is running out on the lame-duck session.
Similarly, Reid called a vote on the immigration measure known as the Dream Act, but then pulled the bill from the Senate floor Wednesday, minutes before it was to be taken up. The move disappointed ardent supporters of the law, which would provide a path to legal status for young illegal immigrants. But it was necessary to avoid certain defeat under the GOP threat to block such bills, and could return next week if the tax cut issue is resolved, backers later said.
The tax compromise, worked out in talks between Obama and Republican leaders, would extend tax breaks enacted under President George W. Bush for two years in exchange for continuing jobless benefits for the long-term unemployed.
But the details of the plan are drawing concern. Despite the political pressure of a tax increase Jan. 1 if Congress fails to act, more lawmakers from both parties expressed misgivings Friday.
“If the Democrats are going to lard it up with even more spending, guys like me are going to have to vote no,” said Rep. Jason Chaffetz (R- Utah). The plan now has an estimated cost of $858 billion.
Rep. Jeff Flake (R-Ariz.) said that while he knew of only a handful of Republicans like himself who were planning to vote against the tax deal, “that list is growing.”
One new name on the list, Sen. Jim DeMint (R-S.C.), told supporters in an e-mail, “I’m not going to be bullied into voting for things that will hurt our country because politicians in Washington ignored the problem until it was a crisis.”
Beyond the Republican priority of renewing the Bush-era tax breaks for all income levels and a Democratic goal of extending unemployment benefits, DeMint complained that the Senate measure would extend “ethanol subsidies, tax breaks for film and television producers, giveaways for Puerto Rican rum manufacturers [and] favors for auto racing track owners.”
Daniel Pfeiffer, a senior advisor to Obama, said the White House is showing that despite grousing from Capitol Hill, the tax deal has been embraced by the broader population.
Obama has been calling lawmakers and urging them to support the deal. It’s not clear whether he will venture to Capitol Hill and lobby them in person — something he has done in past debates.
The deal won an important endorsement Friday from the U.S. Chamber of Commerce.
Rep. Paul D. Ryan (R-Wis.), who will chair the House Budget Committee in the next Congress, also expressed optimism that legislation would pass before the end of the year.
“There’s a lot in this deal I don’t like,” he told Bloomberg Television on Friday. “But what I don’t like the most is a huge tax increase in January that’s going to put a lot of volatility in the economy and do damage to the economy and job creation.”
Even though the deal has drawn opposition from some conservative lawmakers, Dennis Whitfield, executive vice president of the American Conservative Union, said his group backs the plan, “but reluctantly.”
The efforts to round up votes come as the Senate prepares to hold its first vote Monday on the process of approving the tax package. In the remaining days of this congressional session, House Democrats must decide how far they are willing to fight to change the proposal. The Senate could send the bill to the House by midweek.
Senate leaders added a clean-energy measure eagerly sought by Democrats. They also added an extension of a ethanol tax credit dear to farm-state lawmakers from both parties.
Rep. George Miller (D-Martinez) said the addition of the clean-energy provision to the Senate bill — an extension of a provision of the economic stimulus that provides grants for renewable energy projects — is helpful, but that more needs to be changed.
“The big problem is just the incredible economic disparity in the benefits of this package,” he said in an interview, citing a provision that would impose a 35% tax on estates larger than $5 million, which many Democrats complain is too generous.