Tax follies, cont’d

TAX FOLLIES, CONT’D…. Developments in the Senate yesterday weren’t surprising, but they were nevertheless unpleasant. Democrats brought two tax-cut compromise packages to the floor, both of which would have made permanent tax breaks for the middle class, and both of which enjoyed the support of a majority of the Senate, a majority of the House, and according to recent polling, at least a plurality of the public.

Republicans balked anyway. They not only opposed the measures, they refused to give them up-or-down votes. Both proposals garnered 53-vote majorities, which means, they both were defeated.

So, now what? Bush-era rates are still set to expire in 26 days, and Republicans are still prepared to hold Congress hostage until the tax cuts for the wealthy are protected, at least temporarily.

This puts the White House in the position of still trying to strike some kind of deal. After developments in the Senate, President Obama said officials need to “resolve the impasse in the next few days,” adding, “So we are going to continue to work on this issue through the weekend, into early next week. And I’m going to be rolling up my sleeves with the leaders in both parties in Congress. We need to get this resolved, and I’m confident we can do it.”

The remarks were followed by some closed-door chats.

Obama met Saturday afternoon with Reid and House Speaker Nancy Pelosi (D-Calif.) at the White House, telling them that he’ll oppose any deal that doesn’t extend unemployment insurance and lacks a package of tax cuts targeted at the middle class, said a White House official. It was the kind of clear signal that congressional leaders were seeking, but they still want the president to lay down these markers publicly.

Vice President Joe Biden met Saturday night at his residence with Pelosi, House Majority Leader Steny Hoyer (D-Md.), Rep. Chris Van Hollen (D-Md.) and interim White House Chief of Staff Pete Rouse.

They discussed next steps for about two hours, according to a source familiar with the meeting — an unusual weekend strategy session that suggest the administration is anxious to bring the issue to a resolution.

White House officials seem to be making a fairly big deal about jobless aid, telling reporters that this is a deal-breaker. President Obama isn’t drawing many lines in the sand these days, but he isn’t leaving any real doubts about this one: if the tax policy deal doesn’t include an extension of unemployment benefits, he’ll reject it.

Sam Stein added, “Putting aside when or how the announcement is made, the quote from the White House official portends a deal along the lines that Hill aides projected last week. In exchange for a temporary extension of Bush tax cuts, Democrats will secure an extension of unemployment benefits, a few more tax cut proposals, and a vote on the START Treaty.”

The very limited calendar remains a huge problem. The Democratic leadership intends to wrap up the lame-duck session entirely on Dec. 17 — a week from Friday. That gives the chamber less than two weeks (12 days) to wrap up a deal on taxes, fund the government, and hold votes on New START ratification, DADT repeal, the DREAM Act, the fixed food-safety bill, and several other items.

If Republican “moderates” insist on two full weeks of debate on DADT, repeal is impossible. If Republicans block literally everything until the tax issue is resolved to their satisfaction, passing anything in the lame-duck session may be impossible.

The calendar may be slightly more forgiving if the leadership also opened up the following week (the week leading up to Christmas) for floor action, but senators who want to return home for the holidays appear anxious to avoid that scenario.