Peter DeFazio said he and others in Congress have 'tremendous concerns.' Obama 'confident' amid tax revolt

The House Democratic Caucus voted Thursday to oppose President Barack Obama’s tax plan, throwing into flux weeks of negotiations on an issue that has turned many congressional Democrats against the White House.

But in an interview with NPR Thursday, Obama said he still expected a final agreement that would continue the Bush tax cuts beyond their scheduled Dec. 31 expiration date, despite the protests in the House.


“Here’s what I’m confident about – that nobody – Democrat or Republican – wants to see people’s paychecks smaller on January 1 because Congress didn’t act,” Obama told NPR.

Obama also signaled that he expected some minor changes to the plan to satisfy the concerns of wavering Democrats in the House and Senate – but insisted that the broad outlines of the final bill would be what he proposed this week, with tax cuts continuing for all Americans for two years and an extension of unemployment benefits through 2011.

“My sense is, is that there are going to be discussions between both House and Senate leadership about all the final elements of the package. Keep in mind, we didn’t actually write a bill; we put forward a framework. I’m confident that the framework is going to look like the one that we put forward,” Obama told NPR. House Democratic aides Thursday evening indicated that lawmakers in the Senate and House would likely reenter negotiations over the bill.

House Democratic aides Thursday evening indicated that lawmakers in the Senate and House would likely reenter negotiations over the bill.

Earlier this week, Vice President Joe Biden had told Democrats the tax-cut plan was a “take it or leave it” proposition. That prompted one Democrat, Rep. Lloyd Doggett of Texas, who helped draft Thursday’s resolution to say: “If it’s take it or leave it, we’ll leave it.”

Oregon Rep. Peter DeFazio offered the resolution in a closed Democratic caucus meeting Thursday morning that said Democrats would oppose the bill in its current form. It is a nonbinding measure but illustrates Democratic displeasure with the bill that extends upper-income tax cuts and offers what they consider a generous deal to Republicans on the estate tax.

“We have tremendous concerns about what was given away by the White House to Mitch McConnell and the Senate,” DeFazio said after emerging from the meeting in the Capitol basement. McConnell and Vice President Joe Biden were key players in the final round of talks to reach the $900 billion agreement.

At one point during the meeting, a chant of "Just say no!" could be heard coming from the closed-door meeting of the Democratic Caucus. Then Rep. Anthony Weiner (D-N.Y.) led the group in a round of "No we can't."

While this doesn’t necessarily scuttle the whole tax deal, it is “highly unlikely” that the tax-cut agreement will come to the floor as is, according to senior Democratic aides. A tax compromise could still pass if an overwhelming majority of Republicans voted for it alongside several dozen Democrats.

But at this point, Democrats are making it clear they want changes before anything comes to the House floor.

Pelosi spokesman Brendan Daly said “this means we will not bring this [agreement] to the floor as is. It has to be changed."

Daly would not outline what revisions House Democrats specifically are seeking, but he did say that Pelosi would stand by today's caucus resolution.

"It’s going to have to be changed," added one top House Democratic staffer.

Pelosi seemed somewhat conciliatory in her statement after the caucus vote, though she chided the tax compromise as the “Senate Republican” bill.

“In the caucus today, House Democrats supported a resolution to reject the Senate Republican tax provisions as currently written,” Pelosi said. “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.”

White House spokeswoman Jen Psaki downplayed the Democratic pushback, saying it’s just part of the legislative process.

“The House and Senate are working through the normal process of bringing a bill forward and we are confident that the major components of the tax framework that we fought for will remain in the final package brought to the floor and ultimately passed by Congress,” Psaki said.

California Rep. George Miller, a key ally of Speaker Nancy Pelosi (D-Calif.), said, "It's the right thing for the caucus to do. This has very far-reaching implications for the deficit, on inequality in the country. They don't like this proposal at all."

Asked whether Pelosi would bring up the package over the objections of her Democratic colleagues, Miller suggested that wouldn't happen without further consultations with rank-and-file lawmakers.

"I think you do well to have another meeting before you change direction," Miller said.

Vermont Rep. Peter Welch on Thursday morning released a letter co-signed by 53 other Democrats, saying they oppose the tax measure. Anger also is coming to a boil because Democrats believe Obama gave up too much too quickly in negotiating with Republicans.

“For once, we’re standing up to him and saying we’re not going to facilitate what we believe is another mistake, plain and simple,” DeFazio said.

But not passing the legislation before the holidays will not bode well for Democrats and the White House. House Republicans are privately saying that they will push for a paid-for extension of unemployment insurance and a permanent extension of all tax rates when they take the majority in 2011.

“Any move by liberals to make the tax burden heavier would make Republican support less likely,” said Rep. Mike Pence (Ind.), chairman of the House GOP Conference. Pence said he his backing for the bill was already “tenuous,” and any dramatic changes by Democrats to the basic framework would cause the deal to fall apart.

“It goes to show that the Democratic Caucus didn’t listen in the last election,” added Rep. Kevin McCarthy (R-Calif.), who will serve as majority whip in the next Congress. “They still believe raising taxes in a recession is what their caucus wants to do, and it’s the wrong thing to do. Even their president disagrees with them.”

Yet Democrats like DeFazio said they are willing to call the “bluff” by GOP congressional leaders to walk away from the agreement with the White House.

“Do you really think the Republicans are going to go home for Christmas having just taken families and devastated them?” DeFazio said. “I think they’re bluffing on unemployment, and if they want to do that, I want to have that fight and so do a lot of other Democrats. They want to cut off people who want jobs and can't find them? They want to cut off their unemployment insurance just before Christmas? Have at it, Mr. Grinch."

But while the liberal core of the Democratic caucus is clearly disappointed, there are still a couple dozen moderate to conservative Democrats who might be obvious targets for “yes” votes on the tax compromise.

Rep. Dan Boren (D-Okla.), for example, said he was "displeased" with his leadership for not bringing the tax bill to a vote.

"A clear majority of the U.S. House of Representatives supports this plan. We are allowing the liberal wing of the Democratic Caucus to hold these critically needed tax cuts hostage," Boren said. "It is long past time to get this deal done and get our economy moving again. Unfortunately, my colleagues are either not listening to what the voters are saying, or they are not interested in doing what is best for the American economy."