Obama summons Bill Clinton to push tax cut case

December 13, 2010

L.A. Times

Richard Simon, Lisa Mascaro and Peter Nicholas

President Obama took the unusual step of turning to a Democratic predecessor, Bill Clinton, to help rescue the tax cut compromise plan as conservative Republicans began to join a widening opposition that includes growing criticism from the president's own party.

Clinton appeared with Obama at the White House briefing room to endorse the deal in the latest twist of the lurching debate, which has tightened its grip on Washington. It was the first such appearance by the former president during Obama's presidency.

The two men entered the briefing room in smiles, with Obama referring to Clinton as "the other guy," before the two spoke seriously. Midway, Obama left to attend a Christmas party and Clinton took questions on his own for some time, a flashback moment, with the White House placard over his shoulder.

But the tax cut compromise, which mixes an uneasy blend of liberal and conservative objectives, now threatens to upend year-end Democratic priorities before the party before surrenders control of the House following last month's GOP midterm election rout.

The GOP has made good on its threat to block any action in the Senate before Congress acts to prevent tax cuts from expiring Dec. 31. As a result, Democratic leaders have been forced into off-balance maneuvers and last-ditch efforts to reach their goals in the tumultuous lame duck congressional session.

One such move this week left a doubtful future for the repeal of the controversial don't ask, don't tell policy against gays serving openly in the military. Senate Majority Leader Harry Reid of Nevada believed he had the 60 Senate votes Democrats need to pass the repeal, which was contained in a complicated military spending bill. But Reid abruptly called a vote Thursday night in the midst of negotiations over the measure, and it was defeated.

That move baffled and infuriated supporters of repeal, who blamed Reid for forcing a vote at the wrong time. But Reid's allies later explained the move as an effort to force the issue into the open because talks were dragging and time was running out on the lame duck session.

Similarly, Reid called a vote on the immigration measure known as the Dream Act, but then pulled the bill from the Senate floor, minutes before it was to be taken up Wednesday. The move disappointed ardent supporters of the law, which would provide a path to legal status for young illegal immigrants. But it was necessary to avoid certain defeat under the GOP threat to block such bills, and could return next week if the tax cut issue is resolved, backers later said.

The basics of the compromise, worked out in talks between Obama and Republican leaders, would extend tax breaks enacted under former President George W. Bush for two years, a key GOP demand, in exchange for continuing jobless benefits for the long-term unemployed.

But the details of the plan are drawing concern. Despite the political pressure of a tax increase on Jan. 1 if Congress fails to act, more lawmakers from both parties expressed misgivings Friday.

``If the Democrats are going to lard it up with even more spending, guys like me are going to have to vote no,'' Rep. Jason Chaffetz (R-Utah) said. The plan now has an estimated cost of $858 billion.

Rep. Jeff Flake (R-Ariz.) said that while he knew only a handful of Republicans like himself who were planning to vote against the tax deal, ``that list is growing.''

One new name on the list, Sen. Jim DeMint (R-S.C.), told supporters in an e-mail, ``I'm not going to be bullied into voting for things that will hurt our country because politicians in Washington ignored the problem until it was a crisis.''

Beyond the Republican priority of renewing the Bush era tax breaks for all income levels and a Democratic goal of extending unemployment benefits, DeMint complained the Senate measure would extend ``ethanol subsidies, tax breaks for film and television producers, giveaways for Puerto Rican rum manufacturers (and) favors for auto racing track owners."

The deal also continued to draw fire from Democrats on Friday as Congressional Black Caucus member spoke out against it.

The White House remained confident a deal will be reached but worked hard to make sure it is, recruiting the mayors of Fresno, Calif., to Kokomo, Mich., to former President Clinton, to help make its case.

"I don't believe there's a better deal out there,'' Clinton said during a White House visit. Democrats will have less bargaining power if they wait until the new Republican-controlled House convenes in January, he added

Daniel Pfeiffer, a senior advisor to Obama, said the White House is showing that despite grousing from Capitol Hill, the tax deal has been embraced by the broader population.

Obama has been calling lawmakers and urging them to support the deal. It's not clear whether he will venture to Capitol Hill and lobby them in person – something he has done in past debates. Obama is also expected to raise the issue in his weekly Saturday morning radio address.

The deal also won an important endorsement Friday from the U.S. Chamber of Commerce.

``Enacting this bipartisan legislation is one of the best steps Congress can take to eliminate the uncertainty that is preventing U.S. employers from hiring, investing, and growing their businesses,'' R. Bruce Josten, the chamber's chief lobbyist, said in a letter to lawmakers.

Rep. Paul Ryan (R-Wis.), who will chair the House Budget Committee in the next Congress, also expressed optimism that legislation would pass before the end of the year.

``There's a lot in this deal I don't like,'' he told Bloomberg Television Friday. ``But what I don't like the most is a huge tax increase in January that's going to put a lot of volatility in the economy and do damage to the economy and job creation."

Even though the deal has drawn opposition from some conservative lawmakers, Dennis Whitfield, executive director of the American Conservative Union said his group backs the plan, "but reluctantly."

"On the spending side, all it does is kick the can down the road," Whitfield said. "From a small business point of view, at least a two-year certainty in the tax rates is very helpful.''

The efforts to round up votes come as the Senate prepares to hold its first vote Monday on the process of approving the tax package. House Democrats must decide how far in the days remaining of this congressional session they are willing to fight to change the proposal. The Senate could send the bill to the House by midweek.

The proposal would extend for two years the tax rates approved during the George W. Bush administration that expire on Dec. 31, ensuring taxes are not raised in the new year.

The package also offers proposals most Democrats support, including a 2% payroll tax holiday that will provide up to $2,000 for workers as well as an extension of unemployment benefits through next year, providing aid to jobless Americans who have not yet exhausted the maximum of 99 weeks assistance in states with high unemployment.

Yet, House Democrats will likely seek to amend the estate tax provisions, which many representatives complain is too generous. The 35% inheritance tax on estates valued at $5 million for singles or $10 million for families would benefit fewer than 3,000 households beyond the Democratic proposal.

"We're waiting to see what takes place on the Senate side,'' Rep. George Miller (D-Calif.) said in an interview.

Senate leaders added a clean-energy measure eagerly sought by Democrats. They also added an extension of a ethanol tax credit dear to farm-state lawmakers from both parties.

Miller said that addition of the clean-energy provision to the Senate bill — an extension of a provision of the economic stimulus that provides grants for renewable energy projects — is helpful, but more needs to be changed.

``The big problem is just the incredible economic disparity in the benefits of this package,'' he said in an interview. Most Democrats wanted to extend the tax cuts to the middle class. The provision dealing with inheritance taxes, he said, is ``just salt in the wounds'' for Democrats. said.

The depth of the Democratic anger was visible on the Senate floor on Friday as Sen. Bernie Sanders (I-Vt.) engaged in a lonely filibuster-like speech against the proposal.

Sanders, perhaps the most liberal member of Congress, held the floor for most of the day Friday, occasionally relieved by fellow Democratic senators who have raised concerns about the deal.

"I'm not here to set any great records or to make a spectacle," Sanders said in opening what would become a day of speech-making. "I am simply here today to take as long as I can to explain to the American people the fact that we have got to do a lot better than this agreement provides."

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