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How Phila.-region lawmakers stand on tax-cut deal

Congressional Democrats, including several from the Philadelphia region, railed Wednesday against President Obama's tax-cut deal with Republicans as the White House sought to squelch the uprising from its base.

Congressional Democrats, including several from the Philadelphia region, railed Wednesday against President Obama's tax-cut deal with Republicans as the White House sought to squelch the uprising from its base.

For all the complaints, the agreement seemed likely to pass in some form because it contains middle-class and business tax breaks and renews benefits for the long-term unemployed - all policies that Democrats favor. It also, though, would extend the Bush-era tax cuts for the wealthiest Americans, which they have tried to block.

Democrats were furious that Obama, who promised in the 2008 campaign to let the tax cuts for the rich expire, had undercut them in negotiating the deal and peeved that he brushed aside Democratic opposition Tuesday as "sanctimonious" and a "purist position."

Obama implored Congress on Wednesday to "get this done" and sent Vice President Biden back to the Capitol to lobby Democrats, as the White House pumped out a torrent of supportive statements from Democratic governors and big-city mayors. The argument: The deal is the best the administration could get, and the tax cuts are necessary as a second stimulus to protect a fragile economic recovery.

Majority Leader Harry Reid (D., Nev.) said the Senate could move to take up a tax-cut agreement "fairly quickly . . . in the next day or two."

It was a mistake not to force Republicans to stand up for the wealthy in votes before the midterm elections, said Rep. Joe Sestak (D., Pa.), who was defeated last month in his Senate bid.

"We could have defined who were the true deficit hawks and who were the chicken hawks," Sestak said, arguing that lower tax rates for the wealthy add more to the deficit than continuing them for the middle class.

"I think the Democratic leadership showed a lack of courage - they were not willing to take the electoral risks," Sestak said. "They handed a gun to the other side. Now it's being held against the working families of the nation, and we can't pull the trigger on them."

Still, Sestak said he was leaning reluctantly toward supporting the deal, in reasoning echoed by others in his party. The payroll-tax cuts alone will mean an average of $3,000 for a family earning $50,000 a year, he said.

Republicans were generally supportive of the deal, and White House advisers hoped that a coalition of GOP lawmakers and moderate "Blue Dog" Democrats would be enough to get the two-year tax-cut extension passed.

"The one thing small-business owners and families told me time and again was that they simply could not afford a tax increase next year," said Rep. Jim Gerlach (R., Pa.). He said the agreement "will put Americans back to work."

Rep. Charlie Dent (R., Pa.), from the Lehigh Valley, said he believed that taxpayers in the higher brackets were often small-business owners who create jobs.

"Overall, I'm glad to see the president has come around on this issue," Dent said.

"Look, this is how compromise works," he said. "The American people expect us to work together. They expect us to get things done for the benefit of the American people."

Rep. Allyson Y. Schwartz (D., Pa.), a member of the tax-writing Ways and Means Committee, praised the parts of the deal that allow businesses to accelerate tax breaks for depreciation of assets and for research and development.

"However, there are some outstanding concerns that need to be addressed before this proposal comes to the House for a vote," she said in a statement. "The estate tax provision is far too generous. In addition, the Republican tax cuts for the wealthiest one percent of Americans should not be extended for two years. Any extension should be more limited."

The deal sets the inheritance tax at 35 percent for individuals bequeathing more than $5 million to their heirs. Schwartz prefers a 2009 bill passed by the House that would set the estate tax at 45 percent and start the exemption at $3.5 million for individuals or $7 million for couples, aides say.

She has not ruled out voting "no" but has not taken a stand on the overall deal.

Sen. Frank Lautenberg (D., N.J.) said Tuesday it was a "probability" he would oppose the tax bill on the Senate floor.

"I don't like what I see, because it looks like there was a ransom paid with a kind of 'Let them eat cake' attitude," Lautenberg said.

Sen. Bob Casey (D., Pa.) said he had not decided how he would vote and said he wanted to see more analysis from independent economists on whether the overall deal would help stimulate recovery.

The evidence he has seen so far, he said, suggests that continuing tax cuts for the middle class would help boost consumer spending, while the wealthy are more likely to bank their windfalls.

The deal also includes an expansion of the Earned Income Tax Credit, and that would help low- and middle-income Americans, Casey said.

"We hear a lot about 'certainty' in the business community, and that is important," Casey said, "but certainty is important for the middle class and for people who are unemployed through no fault of their own as well."

In hindsight, he said, it would have made sense to begin pushing earlier "to make the distinctions clear" with Republicans.

But "the president was in a tough position," Casey said. "He was concerned as I am about making sure we extend the middle-class rates and don't let them run out."

Rep. Tim Holden (D., Pa.), a moderate from Schuylkill County, said he would support the deal.

"The president was not going to get his way in the Senate," he told the Morning Call of Allentown. "... To do nothing is unacceptable for middle-income workers, for the unemployed. It's the best - no, it's the only - deal the president could have cut."

GOP Blocks COLA Increase

House Republicans

on Wednesday thwarted

a Democratic effort to award $250 checks to Social Security recipients facing a second consecutive year without

a cost-of-living increase.

President Obama and Democrats urged approval of the one-time payment, saying seniors barely getting by on Social Security checks faced undue hardships without the COLA increase.

Republicans said that the nation couldn't afford the estimated $14 billion cost of the payment and that the COLA freezes in 2010 and 2011 come after seniors received a significant boost in 2009 - 5.8 percent, the largest in 27 years.

The measure was brought up under a fast-track procedure that required a two-thirds majority for passage. The 254-153 vote in favor of the bill fell short of that goal. Twenty-six Republicans voted for the bill, while 141 opposed it. Democrats were in favor, 228-12.

COLAs are set automatically each year by an inflation measure that was adopted by Congress in 1975.

More than 58 million retirees, disabled people, and surviving family members receive Social Security or Supplemental Security Income checks. The average monthly check is $1,072.

- Associated Press