Obama sends Biden to Capitol Hill to sell tax deal to angry Dems

Vice President Joe Biden will go to Capitol Hill Tuesday to sell Democrats on the tentative deal President Obama struck with congressional Republicans to extend the Bush tax cuts for two years.

He will attend the Senate Democratic Caucus lunch at 1:30 p.m., according to his schedule.

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Obama is sending Biden in the hopes of molding Senate Democrats’ opinions before they harden into opposition.
 
A Republican congressional official predicted that potential Democratic opposition is the biggest hurdle to clinching a deal on taxes before the end of the year.
 
“A big question is whether the administration can sell this work product to House and Senate Democrats,” said the GOP source.
 
A senior administration official expressed confidence that Biden could persuade Democrats to support the pending agreement.
 
“We are hopeful we can get good support for this,” said the official. “We will continue the process of talking to members in the House and Senate to bring them on board.”

Biden will brief rank-and-file Democrats on a broad framework that includues an extension of federal unemployment benefits for 13 months and cutting employees’ payroll taxes from 6.2 percent to 4.2 percent, according to a senior Democratic aide.

Senior administration officials who briefed reporters on Monday evening estimated the stimulative effect of the extended unemployment benefits would save more than 600,000 jobs.

The agreement would also cut employees’ payroll taxes by two percent, giving a worker who earns $40,000 a tax cut worth $800 next year. Funds would be transferred to the Social Security trust fund to cover the shortfall.

Extending unemployment benefits and trimming payroll taxes would cost about $176 billion next year. The entire package is estimated to cost more than the $787 billion economic stimulus package that Congress passed at the beginning of 2009.

Senior administration officials, however, declined to confirm the package’s total cost.

Biden has emerged as Obama’s chief flack in dealing with angry Democrats, who began reacting to rumors of a deal last week. The vice president will try to cash in on some of the goodwill he earned during the campaign by traveling across the country to stump and raise money for Democratic incumbents.
 
On Saturday evening, he invited House Democratic leaders to his home to let them vent their complaints about the pending deal to White House interim chief of staff Pete Rouse and Treasury Secretary Timothy Geithner.
 
Biden met with House Democratic leaders again on Monday. The lawmakers delivered a stern message to the vice president that they “are not just going to just rubberstamp” the deal between the White House and Republicans.
 
One liberal lawmaker has already threatened to filibuster the agreement, perhaps delaying its final passage long enough to imperil other priorities such as the New Start nuclear arms treaty.
 
“Not only is this bad public policy — driving up the deficit, increasing the growing gap between the rich and everybody else — I think it is bad politics,” Sen. Bernie Sanders (Vt.), an independent who caucuses with Democrats, said Monday evening on MSNBC's “The Ed Show.”
 
Sanders said he would do whatever he could to block what he called a “very bad agreement.”
 
Senate Democratic leaders are taking a noncommittal public approach to the prospective deal.

“Now that the president has outlined his proposal, Senator Reid plans on discussing it with his caucus tomorrow,” said Jim Manley, spokesman for Senate Majority Leader Harry Reid (D-Nev.) on Monday.
 
Senate Republican leader Mitch McConnell (Ky.) applauded the framework that he helped negotiate with the White House.

“I appreciate the determined efforts of the President and Vice President in working with Republicans on a bipartisan plan to prevent a tax hike on any American and in creating incentives for economic growth,” he said in a statement. "Their efforts reflect a growing bipartisan belief that a new direction is needed if we are to revive the economy and help put millions of Americans back to work.”

McConnell called on Democrats to keep their minds open.

“Members of the Senate and House will review this bipartisan agreement, but I am optimistic that Democrats in Congress will show the same openness to preventing tax hikes the administration has already shown," he said.

The tentative deal would extend all of the Bush tax cuts for a period of two years and federal unemployment benefits through the end of 2011.

The framework calls for a two-year extension of the college-tuition and earned income tax credits. It also includes a provision allowing businesses to write off 100 percent of the cost of new investments in 2011.

The estate tax would be set at 35 percent for inheritances worth more than $5 million for the next two years. The Alternative Minimum Tax would be fixed for years 2010 and 2011, sparing more than 20 million households from higher taxes.

The tentative agreement also extends for two years a litany of business tax credits, such as the research and development tax credit that Republicans have pressed for all year. These tax relief extenders would apply retroactively to 2010 and to 2011.

Senior administration officials emphasized the multiplier effect these various tax provisions would have on the economy. One official said the package includes “a lot of really big provisions to help create jobs and grow the economy.”