Don’t topple economy by rejecting tax deal, Obama tells the Democrats

Don’t topple economy by rejecting tax deal, Obama tells the Democrats

President Obama warned his fellow Democrats on Wednesday that they risk plunging the country into a double-dip recession if they reject his tax-cut deal with Republicans.

As the White House intensified pressure on the president’s own party, and treated the package as a fait accompli, the Senate appeared to move toward passing it swiftly.

But momentum built against the deal among Speaker Nancy Pelosi’s (Calif.) House Democrats, who are enraged by several provisions that have businesses and the wealthiest income earners cheering.

“I’m not sure this bill can pass in this form in the House of Representatives,” Rep. Chris Van Hollen (D-Md.), who is representing House Democrats in tax talks with the administration and Senate negotiators, said Wednesday in an interview on MSNBC.

Van Hollen said Democrats were stunned that Obama agreed to set the estate tax at 35 percent and apply it only to inheritances over $5 million.

“This provision makes it very, very difficult for me to support it in its current form,” he said.

House Financial Services Committee Chairman Barney Frank (D-Mass.) on Wednesday said he opposes the proposal, but believes it will pass.

The White House’s economic arguments are resonating with Democrats in the Senate, where several senators and senior Democratic aides predicted the deal would pass despite the filibuster planned by Sens. Bernie SandersBernard (Bernie) SandersCynthia Nixon: 'Sometimes a little naiveté is exactly what is needed' George Clooney writes Parkland students: 'You make me proud of my country again' Lesson from special election: Run on Social Security, Medicare and lower drug prices MORE (I-Vt.) and Jim DeMint (R-S.C.).

Even Senate critics of the deal haven’t ruled out voting for it, and say it will probably pass the upper chamber.

“I was inclined to vote no, but it’s still a work in progress,” said Sen. Tom HarkinThomas (Tom) Richard HarkinSenate GOP rejects Trump’s call to go big on gun legislation Trump should require federal contractors to follow the law Orrin Hatch, ‘a tough old bird,’ got a lot done in the Senate MORE (D-Iowa). “Let’s see what happens; things are happening.”

Senate Republican Leader Mitch McConnellAddison (Mitch) Mitchell McConnellYou just can't keep good health policy down Trump threatens to veto omnibus over lack of wall funding, DACA fix Democrats desperate for a win hail spending bill MORE (Ky.) has said he expects the vast majority of his conference to support the tax framework, which means Reid needs to corral only about 25 votes.

About a dozen Democratic senators have already spoken favorably of the package or pledged their support, including Sens. Jim Webb (Va.), Michael BennetMichael Farrand Bennet2020 Dems unify around assault weapons ban, putting pressure on colleagues McConnell, Schumer tap colleagues to explore budget reform Democrats march toward single-payer health care MORE (Colo.), Evan Bayh (Ind.), Bill NelsonClarence (Bill) William NelsonSenate GOP chairman calls on Zuckerberg to testify Students bash Congress for inaction on gun control Democrats desperate for a win hail spending bill MORE (Fla.), Ben Nelson (Neb.), Max BaucusMax Sieben BaucusFarmers hit Trump on trade in new ad Feinstein’s trouble underlines Democratic Party’s shift to left 2020 Dems pose a big dilemma for Schumer MORE (Mont.), Tom CarperThomas (Tom) Richard CarperWarren turns focus to Kushner’s loans Overnight Energy: Dems probe EPA security contract | GAO expands inquiry into EPA advisory boards | Dems want more time to comment on drilling plan Overnight Regulation: Senate takes first step to passing Dodd-Frank rollback | House passes bill requiring frequent reviews of financial regs | Conservatives want new checks on IRS rules MORE (Del.) and Joe Lieberman (Conn.), an Independent who caucuses with Democrats.

As of Wednesday afternoon, only two Democrats had said they would vote against the tax package: Sanders, the other Independent who caucuses with Democrats, and Sen. Mark UdallMark Emery UdallSenate GOP rejects Trump’s call to go big on gun legislation Democratic primary could upend bid for Colorado seat Picking 2018 candidates pits McConnell vs. GOP groups MORE (D-Colo.). Sen. Patrick LeahyPatrick Joseph LeahyTop Senate Dems demand report from Trump on UK nerve agent attack The Hill's 12:30 Report McCabe oversaw criminal probe into Sessions over testimony on Russian contacts: report MORE (D-Vt.) has also strongly criticized the deal as “wrong for most Vermonters” and “wrong for our country.”

In the House, at least 34 Democrats have signed a letter circulated by Rep. Peter WelchPeter Francis WelchLawmakers renew call for end to 'black budget' secrecy So-called ‘Dem’ ethanol bill has it all wrong Overnight Regulation: Trump officials block GOP governor from skirting ObamaCare rules | House eases pollution rules for some coal plants | Senate vote on Dodd-Frank changes delayed MORE (D-Vt.) stating their staunch opposition to extending tax cuts for the nation’s wealthiest individuals and families.

Obama’s White House started a full-court press on the agreement Wednesday that included a meeting between House Democrats and Vice President Biden.

House Democrats emerged from the meeting saying Biden told them the agreement essentially was final.

“It’s up or down,” Biden told them, according to Rep. Yvette Clarke (D-N.Y.)

Senior advisers to Obama told wavering Democratic lawmakers the tax package will speed the recovery and warned that failure to pass it would have disastrous consequences for the economy.

In a memo circulated to reporters, the White House claimed that if all the Bush tax cuts were allowed to expire, taxes for an average family would rise by $3,000 and economic growth would shrink by as much as 1.7 percent.

Passing the tax package crafted by Obama and GOP leaders could act as a second stimulus package, and White House officials are circulating projections that it could help add 1.5 million to 2 million jobs to the economy.

“We could expect to see more job growth in 2011 and 2012 than they originally anticipated,” Obama told reporters in the Oval Office on Wednesday.

Senate Budget Committee Chairman Kent Conrad (D-N.D.), citing projections from economist Mark Zandi, warned that failure to pass the package would reduce economic growth by as much as 50 percent next year.

Conrad said he opposed the deal Obama and Republicans struck on the estate tax and would prefer to tax estates above $3.5 million at a 45 percent rate. But he conceded that significant revisions to the package are unlikely.

Harkin would like to see unemployment benefits extended for two years, instead of 13 months, as Obama and GOP leaders have agreed. He said the extension of benefits should mirror the two-year extension of tax cuts for the wealthy.

Harkin said he was strongly opposed to setting the estate tax at 35 percent for inheritances over $5 million but also doubts the deal can be renegotiated.

In another sign that the package could move forward, Democratic senators have turned their attention to adding smaller provisions as sweeteners.

Sen. Ron WydenRonald (Ron) Lee WydenLawmakers renew call for end to 'black budget' secrecy Overnight Finance: Stocks bleed as Trump seeks new tariffs on China | House passes .3T omnibus | Senate delay could risk shutdown | All eyes on Rand Paul | Omnibus winners and losers Trump will delay steel tariffs for EU, others MORE (D-Ore.) is leading a push to extend authority for the Build America Bonds program to the deal. Under the program, the federal government reimburses local and state governments a percentage of the interest they pay on municipal bonds.

Sen. Chris CoonsChristopher (Chris) Andrew CoonsOnce on chopping block, Trump's budget puts development finance in overdrive Overnight Defense: Senate sides with Trump on military role in Yemen | Dem vets push for new war authorization on Iraq anniversary | General says time isn't 'right' for space corps Water has experienced a decade of bipartisan success MORE (D-Del.), who supports the effort, says every dollar spent on the program leverages more than $10 in economic activity.

Ten senators have already signed a letter to Reid and McConnell asking them to “include an extension of the Build America Bonds program” as they work on the finishing touches to the compromise.

Sen. Sherrod BrownSherrod Campbell BrownDemocratic senator: People don’t know what’s going on between Trump and Putin Power struggle threatens to sink bank legislation Pension committee must deliver on retirement promise MORE (D-Ohio) is pushing for the extension of the 1603 tax-grant program for the solar and wind energy industries. He would also like to add Health Coverage Tax Credits, which pay as much as 80 percent of healthcare premiums for qualified individuals, to the deal.

Brown, who has been a staunch opponent of extending tax cuts for families earning over $250,000, has not ruled out voting for the tax package. The Ohio senator is up for reelection in 2012.

“There are a lot of good things for a lot of working poor and working low-income people,” he said, while reiterating he opposes the extension of tax cuts for the rich.

Russell Berman contributed to this article.