WASHINGTON -- House Democrats on Thursday emphatically rejected the tax deal President Barack Obama forged with Republicans, insisting that no votes be taken on the package until it is substantially changed.

The declaration came in response to a proposal by Rep. Peter DeFazio that the proposal extending for two years tax cuts for all earners -- even the richest Americans -- bill be kept from the House floor until it is reopened and changed.

The near-unanimous voice vote by the Democratic caucus came soon after DeFazio offered his resolution during an early-morning, closed meeting. And while the vote is not binding and is not likely to kill the agreement, it underscored the anger and unhappiness House Democrats have with the deal and the way the White House conducted negotiations.

In arguing for the ban, DeFazio called the bill "inherently defective" because it rewards the richest American and adds $800 billion to the national debt.    Read more ...

Said Rep. Lloyd Doggett, D-Texas: "If it's take it or leave it, we'll leave it."

The vote, which came after many lawmakers chanted "just say no," will at least temporarily stall what had seemed to be a grudging Democratic movement toward the tax package. White House officials downplayed the vote, saying it's part of the normal legislative process to work with dissenters.
Even so, the action could cause problems for the fragile agreement that the White House earlier in the week said cannot be opened to change. One possible adjustment, however, is the addition of language that extends tax credits for solar, wind and other sources of alternative energy. Rep. Earl Blumenauer, D-Ore., is spearheading the effort that has the support of at least 80 members.

DeFazio's revolt also carried extra weight because House Speaker Nancy Pelosi suggested in a statement after the vote that she shared DeFazio's concerns.

"Democratic priorities remain clear: to provide a tax cut for working families, to create jobs and economic growth, to assist millions of our fellow Americans who have lost their jobs through no fault of their own, and to do this in a fiscally sound way," she said.

House leaders said they hope to revise the bill but the White House and Republican supporters believe there remain enough votes to pass it without change. If that happens, it will be Republicans who deliver the votes for passage.

"We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote," Pelosi said.

Rep. Barney Frank, D-Mass., predicted the tax cut compromise "will be passed by virtually all the Republicans and a minority of Democrats." He said he would vote against it.

Obama said more congressional Democrats would climb aboard as they studied details of the year-end measure.

The package is expected to cost about $900 billion over two years, all added to the federal deficit.

The vote by House Democrats came a day after three of Oregon's four House Democrats said they would vote against the deal Obama negotiated with Republicans to extend tax cuts, calling it an unneeded reward to the richest Americans and an unacceptable hit to the country's debt.

In addition to DeFazio, Blumenauer and Rep. David Wu have said they would vote against the package as written.

defazio.JPGThe Associated PressRep. Peter DeFazio rejects the deal to extend tax cuts, saying it rewards millionaires and costs too much.
Rep. Kurt Schrader said Wednesday he is "leaning heavily at this point" against the proposal but is waiting to read the legislation before making a final decision.

"I heard a clear message from voters - stop the spending," Schrader said, referring to his tough re-election. "Republicans have argued successfully for adding $900 billion to our debt. ... It's poor public policy and, frankly, I campaigned against it."

Blumenauer's defection is notable since he is normally one of the administration's most reliable votes. Not this time.

"By refusing to stare down Republicans on issues that are supported by the American people like assistance for the unemployed and not extending tax cuts for the most well off, the President loses his leverage," Blumenauer said in a statement. "Obama would be supported by Congress if he vetoes proposals that are economically unsound and stands firm.

"I urge my colleagues to help the President and our country by rejecting this expensive and ill-advised proposal," he said.

Oregon provides a snapshot of the deteriorating relations between the White House and congressional Democrats who believe Obama gave away too much to appease Republicans. That anger is complicating plans to pass the bill before the tax breaks for virtually every American expire on Dec. 31.

Among the most outspoken is DeFazio, who called it "a bad deal for the American people."

"The Republican demands to extend tax cuts on income above $250,000 a year and to lower taxes on estates over $10 million will add $250 billion over two years to the federal budget deficit. Just think what we could do with $250 billion," he said.
president barack obama, republicans, tax cut deal, congressThe Associated PressPresident Barack Obama is hoping to convince skeptical - even hostile - Democrats to support the tax deal he reached with Republicans.

And in classic DeFazio fashion, he took a shot at Obama. "The President has allowed himself to be blackmailed by the Senate Republicans and I will not support it. Compromise requires give and take, but once, again, the middle class gave and the millionaires took."

"President Obama has announced a deal on tax cuts for millionaires with Senate Republicans that will cost average Americans dearly," DeFazio said in a statement.

Wu was less vocal but his unhappiness is equally apparent. He was one of 54 members who signed a letter circulated by Rep. Peter Welch, D-Vt., calling the tax deal "fiscally irresponsible" and "grossly unfair."

The declarations from all the Oregon lawmakers came as the Obama administration worked to secure votes for the package and quell an intensifying uprising from Democrats who dislike the deal.

The president forcefully rejected suggestions he had abandoned his allies to strike an agreement with the GOP.

"I think it is inaccurate to characterize Democrats, writ large, as quote-unquote betrayed," he said.

Obama was sending Vice President Joe Biden to Capitol Hill Wednesday afternoon to urge resistant House Democrats to support the package. Biden lobbied Senate Democrats on Tuesday.

Some Democrats are unhappy that Obama agreed to extend expiring tax cuts not just for the middle class but also for higher earners, and that he agreed to impose a lower estate tax on wealthy heirs. Both provisions are seen by many Democrats as giveaways to the rich that will do little to help the economy.

In return, Democrats would get extended jobless benefits for people who have been unemployed for long stretches. Workers would also see their share of Social Security payroll taxes cut by nearly a third for the coming year, a boost in take-home pay meant to encourage spending and aid the economy.

"So far, the response has not been very good," House Speaker Nancy Pelosi said. She called the estate tax provision "a bridge too far."

If Democrats kill the package, it would mark a stunning defeat for Obama and a huge political bet that voters will blame Republicans as much as Democrats for an impasse that would lead to higher taxes starting Jan. 1. Many congressional insiders doubt that Democrats will take that gamble. But liberal lawmakers' discontent is hard to measure in the wake of last month's big election setbacks.

Senior White House adviser David Axelrod said Wednesday he believes disenchanted Democrats will decide to vote for the package when they realize how angry voters will be "if they wake up on Jan. 1" with a substantial tax increase, roughly $3,000 a year for a typical family.

He said Obama had no choice but to accede to Republican demands for continuing existing rates for the wealthy in order to spare higher rates for the middle class. He also said the president was forced to make concessions to protect the jobless.

"We're not going to play Russian roulette with the lives of the American people, with all the millions of people that are going to lose their unemployment insurance right now without this bill going forward," Axelrod said in an interview on ABC's "Good Morning America."

If Congress fails to act this month, taxpayers at every income level face a significant tax increase at the start of the year. The new Congress — with Republicans controlling the House and Democrats the Senate — still could extend the tax cuts retroactively next year. But that would make it difficult for employers to withhold the proper amount of taxes from workers' pay.

Senate GOP leader Mitch McConnell of Kentucky said he expects "a large majority" of Senate Republicans to support the package.

Both the Business Roundtable and the U.S. Chamber of Commerce — two business groups that have been at odds with the president's economic policies — praised the package.