Centrist Democrats flock to tax-cut discharge petition

A long list of House Democrats who bucked their party this summer to oppose tax breaks targeting only the middle class have now thrown their support behind the same bill.

Fifteen of the 19 centrist Democrats who joined the GOP in August to kill a Senate-passed proposal extending the Bush-era tax rates only on income below $250,000 have now endorsed a discharge petition pressing Republican leaders to bring that very bill back to the House floor this month.

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The reasons could be varied. Six of the 19 aren't returning next year, for instance, leaving them free to act outside the confines of reelection concerns.

But the most resounding explanation lawmakers gave this week for their switch is also the most simple: The imminent "fiscal cliff" deadline, they say, has simply forced a change of heart.

"With less than four weeks remaining this year, American families and small businesses are counting on Congress to meet the challenge of the so-called 'fiscal cliff,'" Rep. Henry Cuellar (D-Texas), one of the 15 converts, said Thursday in an email.

"We have an obligation to take action on this discharge petition, or any reasonable legislative effort that ensures tax relief for the middle class and small businesses," he added. "It is no longer an option to do nothing."

Rep. Tim Walz, the lead sponsor of the discharge petition, sounded a similar note. The Minnesota Democrat said he opposed the Senate bill in August over concerns that his farm-heavy district would get hit hard by the estate-tax provisions in that proposal. But with the clock ticking down toward 2013, he said addressing the middle-class tax rates is the bigger fish to fry.

"In August, I was still making the case that the estate tax needed to be changed in a positive way," Walz said Thursday by phone. "That was August, and I need to live to fight another day on that one.

"The greater good is to get this done for the middle class voters," Walz added, "so I'm willing to make that compromise."

As was the case two years ago, the question over how, or whether, to extend the Bush tax rates has emerged this month as the highest barrier to a bipartisan, lame-duck budget deal.

President Obama and the Democrats have urged a continuation of the lower marginal rates on household income below $250,000, while allowing the rates to increase on income above that level.

Republicans, meanwhile, are warning that a tax hike on upper incomes would cripple thousands of small businesses and prevent hiring in the middle of an ongoing jobs crisis. They want to extend the lower Bush rates for all earners.

The competing proposals both came to the House floor in August. The GOP version passed easily, 256-171, but never had a chance to clear the Democratically controlled Senate. Obama's proposal – which the Senate had passed in July – failed by a tally of 170-257. Nineteen Democrats joined every Republican to kill the bill.

Four months and a presidential election later, most of those Democrats have reconsidered. Only four of the 19 – Reps. Jim Matheson (Utah), John Barrow (Ga.), Mike McIntyre (N.C.) and Joe Donnelly (Ind.) – have not endorsed Walz's discharge petition.

Of the 15 who have signed on, several are either retiring or were defeated in this year's elections, meaning the "fiscal cliff" fight will be their last on Capitol Hill. Blue Dog Democratic Reps. Dan Boren (Okla.), Heath Shuler (N.C.) and Mike Ross (Ark.), for instance, are all retiring at the end of the month, while Reps. Ben Chandler (Ky.), Larry Kissell (N.C.) and Jason Altmire (Pa.) all lost their reelection bids.

Among the nine who will return to Capitol Hill next year, most cited the time crunch as their principal impetus for backing the Senate plan they opposed in August.

"It's mostly a function of: Now it's December and not August," Rep. Kurt Schrader (D-Ore.), who voted against the $250K threshold over the summer but endorsed the petition, said Thursday by phone. "We've got to move something along."

Conversely, several Democrats who supported Obama's plan in August are now declining to endorse the Walz petition. The office of Rep. Carolyn McCarthy, for instance, said the New York Democrat is concerned the $250,000 threshold is too low considering the high cost of living in her Long Island district.

"That's intentional," spokesman Shams Tarek said of McCarthy withholding her signature. He could not, however, explain her support for that threshold in August.

Rep. Jim Moran is another Democrat in a tough spot over the discharge petition. Moran voted in favor of the Senate's middle-class-only tax cut extension in August, but his Northern Virginia district is among the wealthiest in the country, and he has not endorsed the Democrats' discharge petition.

Pressed on the issue this week, Moran's office said only that the Virginia Democrat "is still reviewing the petition."

As of Wednesday, Walz's petition had attracted the support of 178 of the 191 Democrats in the House. No Republicans have endorsed the measure, even those who support an immediate middle-class tax-cut extension. But at least one, Rep. Walter Jones (R-N.C.), said he might reconsider if the impasse between GOP leaders and the White House remains next week.

Rep. Mike Thompson (D-Calif.), who voted against both versions of the Bush-rate extensions in August, said he did so because neither proposal was offset by changes elsewhere in the budget. The looming Jan. 1 middle-class tax hikes, his office said Thursday, has forced those deficit concerns to the back burner – and drew his name to the petition.

"The only thing worse than tax cuts that aren’t paid for," said spokesman Austin Vevurka, "may in fact be going over the fiscal cliff.”

Brain Tam contributed to this report.