President Obama’s first postelection effort to strike a deal with Republicans is on the line in the tax-cut debate, where he finds himself fighting House Democrats who say he conceded too much to the GOP on an estate-tax cut.
Even as the Senate voted to advance the deal Mr. Obama and Republicans cut last week, House leaders’ intense resistance to the estate-tax provisions not only threatens the deal, but could undercut the president’s own promise to work with the newly ascendent GOP in the next Congress.
“He made a deal,” Republican strategist Michael McKenna said. “If he’s not, in fact, the leader of the Democratic Party and can’t deliver on this relatively modest deal, he’s essentially done being president. It’s the parliamentary equivalent of a vote of no confidence because who will waste time talking to him anymore?”
But House Democrats — who in their first postelection rebuke of the president adopted a resolution disapproving of the compromise — insist that the estate-tax provision is not a core part of the bargain and express disbelief that the GOP was able to wrangle such a concession when Democrats still control both chambers of Congress and the presidency.
“For a policy priority that was not achievable under Republicans when they controlled all the branches of power, it seems interesting that they would be able to get it now,” a senior Democratic aide said.
The estate tax, which was repealed for 2010, would climb from zero to a top rate of 35 percent for estates worth more than $5 million under the plan negotiated by Mr. Obama and the GOP. If Congress doesn’t act, the rate would return to 2001 level of 55 percent for all estates above $1 million.
While Mr. Obama says he finds parts of the deal just as unpalatable as his liberal colleagues, he’s been adamant that breaking a campaign promise and agreeing to extending Bush-era tax cuts for wealthier taxpayers is the only way to ensure that taxes won’t go up on middle-class Americans. In addition to preventing tax increases on Jan. 1, the deal extends unemployment benefits and imposes a temporary payroll tax cut.
The compromise marked the first postelection compromise with Republicans, who in January will take over the House and see their numbers rise in the Senate. Senate Democrats largely agreed, and joined Republicans to move ahead on the bill Mr. Obama hailed as a “substantial victory for middle-class families.”
While many House Democrats hit the White House for keeping them in the dark over the negotiations with Senate Republicans, party leaders say they won’t hold up the final package. Critics want a separate vote on the estate-tax provision of the deal.
The Democratic aide stressed that the caucus still has “a ton of respect for the president” and said the disagreement is nothing atypical.
“I don’t think it weakens the president at all,” said the aide when asked if the challenge undermines Mr. Obama in future dealings with Republicans. “It’s typical of the legislative process, which in the House is … never clean. It doesn’t matter who the president is, there’s always going to be factions of one party or another that disagree with the final product. It’s just the way it is, especially with Democrats [since] we have a very diverse party.”
The deal Mr. Obama cut with Republicans reminded some observers of the tactic President Clinton used to use, which became known as triangulation. Mr. Clinton would sacrifice both his party’s liberal base and Republicans’ more conservative elements and try to work out compromises with more centrist Republicans and Democrats.
Last week, Mr. Clinton joined Mr. Obama at the White House to show support for the tax-cut deal, and said he understands “where they’re coming from,” but “given all the alternatives that I can imagine actually becoming law, this is the best economic result for America.”
“There is no way you can have a compromise without having something in the bill that you don’t like,” he said.