WASHINGTON - The White House expressed confidence yesterday that President Obama's deal with Republicans will pass by year's end, averting a Jan. 1 increase in income taxes for nearly all Americans, even the highest earners. In a sign of fading resistance, a Democratic leader said the lame-duck House will try to make changes, but won't block the bill.
Ahead of a test vote in the Senate today, Obama adviser David Axelrod predicted the president's compromise deal would win out despite a tougher sell in the House. Majority Democrats, who lose control of the House to Republicans in January, voted last week not to allow it to reach the floor without changes to scale back relief for wealthy estates.
The package also would renew a program of jobless benefits for the long-term unemployed that is due to lapse within days and put in place a one-year cut in Social Security taxes.
"We believe that when it comes back to the House, that we will get a vote, and that we'll prevail there, because at the end of the day, no one wants to see taxes go up on 150 million Americans" on New Year's Day, Axelrod said. "No one wants to see 2 million people lose their unemployment insurance, and everybody understands what it would mean for the economy if we don't get this done."
Maryland Rep. Chris Van Hollen, a member of the Democratic leadership who represented the House in negotiations with the administration, made clear that Democrats strongly object to extending breaks to estates as large as $5 million. But he indicated that the issue would not be a deal-breaker if Republicans refuse to relent and said middle-class families will get their tax relief.
At the insistence of Republicans, the plan includes a more generous estate tax provision: The first $5 million of a couple's estate could pass to heirs without taxation, and an additional $5 million for the spouse. The balance would be subject to a 35 percent tax rate.
That provision infuriated Democrats who are already unhappy with Obama for agreeing to extend tax cuts at incomes of more than $200,000 for individuals and $250,000 for couples, and who say the tax breaks will unnecessarily add to the rising federal deficit.