Tax Compromise Survives US House, Goes to White House For Signature

Obama’s tax compromise with the GOP survived liberal opposition in the House, late last night.

Congress approved the most significant tax bill in nearly a decade late Thursday, overcoming liberal resistance to continue for two more years tax breaks enacted under president George W. Bush and to provide a fresh boost of federal support to the tepid economic recovery.

The package, brokered by President Obama and Republican leaders in the wake of the November elections, angered many Democrats, who have long argued that the Bush tax cuts were skewed to benefit the wealthy. But their last-minute campaign to scale back the bill's benefits for taxpayers at the highest income levels failed, and the House passed the measure 277 to 148, with 112 Democrats and 36 Republicans voting "no."

"This bill, the president of the United States believes and I believe, will have a positive effect on the economy," said House Majority Leader Steny H. Hoyer (D-Md.). "I will vote for this bill because I don't want to see middle-income working people in America get a tax increase, because I think that will be a depressant on an economy that needs to be lifted up."

The $858 billion package now goes to the White House. With his signature expected as soon as Friday, Obama will prevent taxes from rising on New Year's Day for virtually every American household. The measure also will guarantee unemployed workers in hard-hit states up to 99 weeks of jobless benefits through the end of next year. And it will create major new incentives for business and consumer spending in 2011, including a two-percentage-point reduction in the Social Security payroll tax that would let workers keep as much as $2,136.

The package breezed through the Senate earlier this week on a vote of 81 to 19, giving Obama his strongest bipartisan victory on a major initiative since he took office.

This was a bit of a victory for both sides, really. The GOP was able to get all of the tax rates extended for two years, and Obama and the Democrats were able to get unemployment compensation extended for another year.

However, what ever benefit that Obama would have received from being able to broker this compromise was largely negated, when he called the Republicans “hostage takers” and Democrats “sanctimonious”.

While some on the right might argue that it would have been better to let the tax cuts lapse, in order to get a better deal, next year, when the Republicans gain control the House and get stronger in the Senate. However, I don’t believe that letting taxes go up, even if it is just for a month, is a good idea, when we are still struggling economically. It could have been a disaster and cause businesses to panic, and unemployment could have gone up a few points. This was the best thing that we could do, at this point in time.

Breaking: Democrats to Add "Fix" to Tax Cut Compromise That Would Could Seriously Jeopardize Passage, Update: Pomeroy Failed

In order to ensure that the liberal Democrats will vote for the tax compromise, leaders have are attempting to pass an amendment that will likely kill the bill in the Senate:

Moments ago, House Rules Committee chair Louise Slaughter (D., N.Y.) told reporters “we are going to put an extra vote in” to the rule governing debate on the tax deal.

House Democrats say there will likely be a total of four votes tonight related to the tax bill:

1) A vote to amend the existing rule to include a simple up-or-down vote on the tax deal.

2) A vote on the rule itself

3) A vote on the Pomeroy amendment, which would increase estate tax rates from the levels in the Senate bill.

4) A vote on final passage of the bill.

If 1-4 all pass, the bill would go to the Senate, where it is likely dead in the water. If the Pomeroy amendment fails, and the Senate version of the bill is passed unchanged, it would go directly to the president’s desk.

If this passes, they would raising the estate tax in the House version of the bill, which would be an ender in the Senate.

Update: Pomeroy failed:

Opposition in the House crumpled in the face of that overwhelming showing, though House liberals insisted on offering an alternative that would levy a higher tax on estates than the Obama-GOP compromise will impose. That effort failed shortly before midnight, 194 to 233.

Breaking: Obama Hands the Presidency Back to Bill Clinton or Something/Update: Added Best Twitter Quips From Obama/Clinton WH Presser

Apparently, President Obama had better things to do than talk to the press about the bill that would prevent the massive tax increases for all Americans that is looming large on the minds of this nation or about the deadline that is quickly approaching for said tax bill:

Obama had already held a press conference this week and taking questions from reporters was the last thing he wanted to do. “I've been keeping the first lady waiting for about half an hour, so I'm going to take off,” was his response to the first question directed at him.

“Well, I don't want to make her mad,” Clinton joked. “Please go.”

In a town obsessed with comparing Clinton and Obama and 1994 and 2010, the scene came to life Friday. The two men met privately in the Oval Office for over an hour before deciding at the last minute to make an appearance in front of the cameras, sending the few reporters who were still at the White House late Friday afternoon scrambling. Obama spoke for all of 90 seconds.

“I thought, given the fact that he presided over as good an economy as we've seen in our lifetimes, that it might useful for him to share some of his thoughts,” he said before turning the podium over to Clinton. “I'm going to let him speak very briefly, and then I've actually got to go over and do some – just one more Christmas party. So he may decide he wants to take some questions, but I wanted to make sure that you guys heard from him directly.”

“First of all, I feel awkward being here, and now you're going to leave me all by myself?” Clinton joked, getting a smile out of his successor.

But the former president couldn’t get enough. Clinton fielded nearly a dozen questions, twice as many as Obama took during his briefing room press conference on Tuesday. He knew the reporters by name – calling out Ann Compton of ABC and George Condon of the National Journal with ease. Obama’s press secretary, Robert Gibbs, repeatedly tried in vain to rein him in. (“Gibbs will call ‘last question,’” Obama informed reporters as he left for the party.)

But even before Obama left Clinton alone, the former president was the center of attention. One of the cable television shots had completely blocked Obama out, even as he stood by Clinton’s side, his arms crossed, nodding occasionally while his predecessor delved into his thinking on the tax cuts compromise and went on to throw his support behind Senate ratification of the new START treaty with Russia

Twitter was a buzz during this press conference. My twitter feed is filled with snarky comments regarding his swift departure from the press conference and the possible reasons for it.

Given the obviouse backlash that followed this presser, I have to wonder: what in the world was he thinking? He has to know how this would look. This makes him look like he doesn’t really care much about this issue at all or that he doesn’t take the office of the presidency that seriously.

Alternate headline: Obama Tells America That He’s Just Not That Into You

Update: Here a few of those snarky comments that I mentioned above:

@thecajunboy

"I think Barack Obama just said "F It!" and handed the presidency over to Bill Clinton."

@daveweigel

"Remember when folks were worried that President Hillary would give too much influence to Bill? So yeah."

@keder

"The current President looks very satisfied that the former President is doing his job for him. I've never seen a stranger spectacle."

Rep. Ellison (D-MN): We Must Create "Real Crisis" to Force Change in Obama's Tax Compromise

On an interview with Minnesota Public Radio, Democratic Representative Keith Ellison from Minnesota called for fellow Democrats to cause a “real crisis”, in order to force Republicans to drop the tax rate extension for those in the $250.000 and above tax bracket:

Minnesota 5th District Congressman Keith Ellison said Thursday that Democratic lawmakers "need to create a real crisis" to force Republicans to renegotiate the tax cut compromise.

House Democrats voted Thursday to reject the tax cut deal between the White House and Congressional Republicans.

The compromise would extend Bush-era tax cuts for all Americans, including the wealthy. It also would renew benefits for the long-term unemployed, a measure President Obama had pushed for to prevent about 2 million Americans from losing benefits in the coming weeks. Republicans had opposed extending unemployment benefits.

Ellison, who was recently elected co-chair of the Progressive caucus in the House, voted against the compromise.

"I think that we need to create a real crisis here so that the Republicans will have to answer for denying Americans unemployment benefits on the eve of the Christmas holiday," Ellison said. "We let them off the hook, in my opinion."

Ellison is hoping to play a game of chicken with everyone’s taxes and the health of our economy. He is betting on that the Republicans would rather raise taxes on those who create jobs for this economy and cost us job growth than to let them expire for everyone and have everyone’s taxes go up in a few weeks.

However, a few Republicans, like Jim DeMint, have indicated that they are not totally opposed to letting the cuts expire in January. They would do this looking to get an even better deal, when they have a greater majority.

If they go that route, they have, also, indicated that any new tax bill would be retroactive to the beginning of the year to ensure that no one will pay higher taxes in the end. This would still cause more money to be taken out of people’s checks at the beginning of the year, until it gets passed. However, people would get their money back in the form of a refund, when they file their 2011 this is the best way to go, though, because a dip in people’s take home pay, no matter how if it is only for a few weeks, will have a negative effect on our economy and cause a lull that would be felt for longer than just a few weeks.

But Democrats have much more to lose than the Republicans do by balking at passing the Obama Tax Compromise. They will be negotiating at a much bigger disadvantage next year than the Republicans would, if the deal fell through in Congress. Plus, the White House and the Republicans are positioning the Democrats as the obstructionists, if it fails. They would become the new “Party of No”. The Democrats will talk big over the next week maybe two, but in the end, I believe that they will reluctantly pass it. They are just making sure that the American people know where they stand on the issue. They are grandstanding in the highest order.

I find it amusing that progressive, liberal Democrats have suddenly started to care about huge creating deficits, if there are only a few jobs that are created by this bill. This is what Ellison said about that point, “You need to understand me. I' m not saying that there won't be any jobs created from this bill, but how much per dollar will the jobs cost?” Where was this concern, when the Democrats were passing a about a trillion dollar bill that would in the end create zero jobs net:

A study by Daniel J. Wilson of the San Francisco Federal Reserve Bank suggests that the net job creation from the $814 billion stimulus bill passed in February 2009 was zero by August 2010. In the first year, the stimulus "saved or created" 2 million jobs (not 4 million as repeatedly claimed by the administration), but this number proved to be short-lived, paying for temporary jobs, at a very high cost of $400,000 per job "saved or created."

By August, 2010, the impact of the stimulus on net job creation had disappeared. This is an astounding result, which destroys the Paul Krugman argument that the economy would be so much better right now if only Congress had approved much more spending in February 2009. Double the initial spending, double the number of temporary jobs, with likely the same net result by this point in time, or a trivial number of "permanent jobs created . In fact, the unemployment rate is at a substantially higher percentage rate today at 9.8% than when the stimulus bill was passed.

That $400,000 per job figure based on the assumumption that 2 million jobs would have been created. It was no where near that, and what jobs were created are now gone. He is being a bit of a hypocrite if he didn’t care then but cares now.

Using class warefare rhetoric, he goes onto complain that letting people keep their own money is somehow not fair. They want to keep taxes low for everyone not just the rich. So, how is that not fair? Liberals believe that your money is really the government’s money, and they are only being gracious in letting you keep as much money as they do. Only in the minds of liberals, do they believe that letting people keep the money that they make is unfair.

DeMint: On Second Thought I'm Not 100% Committed to Filibustering Obama's Tax Compromise

Two days ago, Senator Jim DeMint (R-SC) went onto the Hugh Hewitt radio show and flat out said that he'd vote no on both cloture and in general votes for the tax cut compromise:

HH: I’ve got some quick questions for you. The first is if the deal reached between the President and the Republican leadership yesterday makes it to the floor of the Senate in substantially the same form, will you vote for cloture to allow a final vote on it? And would you vote for it on that final vote if it cleared cloture?

JD: No.

HH: On both counts?

JD: On both counts.

However, after being blasted by many, including Jennifer Rubin, his office has walked back his previous statement in an email sent to the Washington Post's conservative writer:

Senator Jim DeMint's staff pushed back hard on my post earlier today, insisting DeMint is not really threatening to filibuster the bipartisan tax deal. Spokesman Wesley Denton emailed me, "Senator DeMint has simply stated he does not support the deal as currently structured as it includes huge new deficit spending and death tax hikes. Americans just voted in a historic election for Washington to stop the deficit spending that is mortgaging our children's future." He also defended DeMint's position on the death tax, arguing that "there is no question that raising the death tax from its current rate of zero to 35 percent is a large tax hike that will hurt family farms and small businesses and could destroy hundreds of thousands of jobs." The bottom line seems to be that DeMint will be "open to a temporary extension of all current tax rates without new deficit spending," but he won't give up pushing for the Bush tax rates to become permanent.

So, he is still saying that he's against the compromise, but he just isn't going to commit to the filibuster, just yet. DeMint may very well come around on the fact that this may be the best deal that he can get and still get the bill passed before taxes go up in three weeks. Time is running out, and the escalating pressure of the upcoming deadline will probably be what gets those that aren't so sure about this bill, right now, on both sides, to eventually concede that this is the best thing to do for the country. I would expect DeMint to cave sometime next week, after other Republicans talk to him and convince him to support the bill.

H/T to HotAir's Allahpundit

Keeping it Classy: Democrat Calls Obama's Tax Compromise "Republican Wet Dream Act"

A congressman from New York took a shot at Obama's Tax Compromise using crude language:

Rep. Gary Ackerman (D-N.Y.) used a crude play on words Wednesday, when he described what he saw as Obama's gift to the GOP in the recent tax cut deal as the "Republican Wet Dream Act" -- apparently no relation to the actual Dream Act.

"Members of the Democratic caucus are saying 'why should we take this vote, we're gonna get blamed for adding to the deficit,'" Ackerman told MSNBC's Dylan Ratigan in his analysis of the potential political consequences of passing Obama's tax plan. "This isn't the Dream Act, this is the Republican Wet Dream Act. They get the Democrats to add to the deficit, they get all the benefits for their wealthiest friends in America to pay them off for their huge contributions that they made during the campaign and got an exemption from the U.S. Supreme Court. The whole thing is an absolute absurdity."

Can we please refrain from using any sort of juvenile sexual innuendos please?