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.

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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 SandersBernie SandersWarren raised more money from Big Tech employees than other 2020 Democrats: Report Krystal Ball reacts to Ocasio-Cortez endorsing Sanders: 'Class power over girl power' Saagar Enjeti praises Yang for bringing threat of automation to forefront at Ohio debate 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 HarkinWisconsin lawmaker gets buzz-cut after vowing not to cut hair until sign language bill passed Democratic debates kick off Iowa summer sprint Key endorsements: A who's who in early states MORE (D-Iowa). “Let’s see what happens; things are happening.”

Senate Republican Leader Mitch McConnellAddison (Mitch) Mitchell McConnellOvernight Defense — Presented by Boeing — Pence says Turkey agrees to ceasefire | Senators vow to move forward with Turkey sanctions | Mulvaney walks back comments tying Ukraine aid to 2016 probe On The Money: Senate fails to override Trump veto over border emergency | Trump resort to host G-7 next year | Senators to push Turkey sanctions despite ceasefire | McConnell tees up funding votes McConnell tees up government funding votes amid stalemate 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 BennetBennet reintroduces bill to ban lawmakers from becoming lobbyists Schumer seeks focus on health care amid impeachment fever The Hill's 12:30 Report: Hunter Biden speaks out amid Ukraine controversy MORE (Colo.), Evan Bayh (Ind.), Bill NelsonClarence (Bill) William NelsonBottom Line Bottom Line Media and candidates should be ashamed that they don't talk about obesity MORE (Fla.), Ben Nelson (Neb.), Max BaucusMax Sieben BaucusBottom line Overnight Defense: McCain honored in Capitol ceremony | Mattis extends border deployment | Trump to embark on four-country trip after midterms Congress gives McCain the highest honor MORE (Mont.), Tom CarperThomas (Tom) Richard CarperInstead of raising the gas tax, stop wasting money on frivolous projects To stave off a recession, let's pass a transportation infrastructure bill Overnight Energy: Trump tweets he's revoking California's tailpipe waiver | Move comes as Trump visits state | California prepares for court fight | Climate activist Greta Thunberg urges lawmakers to listen to scientists 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 UdallPoll: Trump trails three Democrats by 10 points in Colorado The Hill's Morning Report — Trump and the new Israel-'squad' controversy Colorado candidates vying to take on Gardner warn Hickenlooper they won't back down MORE (D-Colo.). Sen. Patrick LeahyPatrick Joseph LeahyMcConnell tees up government funding votes amid stalemate Rand Paul calls for probe of Democrats over Ukraine letter Senator questions agencies on suicide prevention, response after Epstein's death in federal custody 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 WelchDemocrats see John Bolton as potential star witness Democrats plow ahead as Trump seeks to hobble impeachment effort Democrats claim new momentum from intelligence watchdog testimony 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 WydenHillicon Valley: Zuckerberg defends handling of misinformation in political ads | Biden camp hits Zuckerberg over remarks | Dem bill would jail tech execs for lying about privacy | Consumer safety agency accidentally disclosed personal data Democratic senator introduces bill to jail tech executives for lying about privacy violations Overnight Defense — Presented by Boeing — House passes resolution rebuking Trump over Syria | Sparks fly at White House meeting on Syria | Dems say Trump called Pelosi a 'third-rate politician' | Trump, Graham trade jabs 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 CoonsMeet the dog and 'sea turtle' who launched campaigns for office Senators demand briefing on Trump's decision to withdraw from Syria 2020 Democrats push for gun control action at forum 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 BrownCritics pounce as Facebook crypto project stumbles Trump administration blocked consumer watchdog from public service loan forgiveness program: report Democrats fear Ohio slipping further away in 2020 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.