Liberals giving up tax fight

A House liberal who has led the effort to stop President Obama’s tax compromise with the GOP says efforts to change the package are futile.
 
Rep. Peter Welch (D-Vt.), who just a week ago circulated a letter signed by 54 Democrats urging opposition to the deal, now says the “die is cast.”
 

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“It is academic, OK. The bottom line is that it is a fast moving train and that has become clear and Washington is doing what it is finding easy to do,” he said in an interview with The Hill.
 
“Once the president entered into that agreement with the Senate Republicans even while talks with the House were supposedly under way, that set the tone for the weekend and now you got Americans excited about a trillion dollars that is going to be in effect given away,” Welch said.
 
Many liberals in the House, possibly already sensing it would be difficult to derail a package with the support of the White House and GOP leaders, did not even sign the Welch letter.
 
Since last week, momentum for the compromise has grown.
 
Public opinion has turned in favor of the tax package, and the Senate on Monday overwhelmingly voted to move the tax deal forward. President Clinton also endorsed the deal after a meeting Friday with Obama.
 
Nearly 70 percent of those polled in a Washington Post-ABC News survey support the package negotiated by Obama with Senate Republicans.
 
That deal would extend all of the individual tax rates signed into law by President George W. Bush in 2001 and 2003. It also includes a new 35 percent individual inheritance tax that exempts estates worth $5 million or less.
 
The White House and most Democrats wanted to extend all of those tax rates except for families with income above $250,000 and individuals with income above $200,000 annually. The estate tax provision is also a sore point with House liberals, who see it as far too generous.
 
The Post-ABC poll showed that extending tax cuts for the rich and the estate tax are less popular by themselves, but that the package as a whole is broadly popular.
 
Welch said he would not support allowing all of the tax rates to expire just to stop the tax break for wealthier households. But he blames Obama for negotiating a bad deal with Republicans.
 
“I supported the middle-class tax cut. I voted for it," Welch said. “I believe that we had a tough bargaining position, and had the president negotiated until the ninth inning instead of the seventh inning, we would have prevailed on that.”
 
The Senate’s vote put more pressure on House leaders to agree to the deal.
 
House Majority Leader Steny Hoyer (D-Md.) on Tuesday signaled the House would not block the package.
 
“Obviously, there is strong support for moving ahead,” Hoyer said. “Rarely do you see that big a number,” he added in reference to the 83 senators from both parties, including critics of the deal, who voted to push it forward.
 
Both Hoyer and Rep. Chris Van Hollen (D-Md.), the chief tax negotiator for House Democrats, have said in recent days the caucus would not block action on the expiring tax cuts over its objections to parts of the deal.
 
Welch said he still doesn't think it is responsible to allow the package to move forward, but he repeatedly said there is little chance of the package being derailed.
 
The letter distributed by Welch last week to Speaker Nancy Pelosi (D-Calif.) opposed the Republican demands to extend the Bush tax cuts for millionaires, saying the provision was irresponsible and would add to the deficit.
 
"We support extending tax cuts in full to 98 percent of American taxpayers, as the President initially proposed. He should not back down. Nor should we," the letter said.
 
Now Welch said he hopes the House leaders will at least allow their members to vote separately on the components of the package.
 
“My preference at this point would be to urge the leadership to let members vote separately on the components of the package — on the issues separately,” he said.
 
Welch also praised several parts of the package, including extending the middle-class tax cuts and unemployment benefits for 13 months.