Posted on Tuesday, December 14, 2010
House Democratic efforts to change the tax deal struck by President Obama and congressional Republicans are focusing on an amendment to the estate tax provision, according to senior party sources familiar with a Monday leadership meeting.
But it's not clear that the proposed amendment, which the House passed as a stand-alone bill a year ago, would attract the support needed for adoption.
Utah Rep. Jim Matheson, a leader among moderate Blue Dog Democrats and supporter of the deal, voted for the bill then but prefers the Senate's more-generous version.
"I support the structure of the Senate deal more," Matheson told POLITICO, noting that he's in favor of whatever gets the underlying basket of $850 billion-plus in tax breaks and unemployment benefits through Congress.
The House estate tax proposal, originally written by Rep. Earl Pomeroy (D-N.D.), would apply a 45 percent levy to wealth over $3.5 million. It was adopted 225-220. The president and congressional Republicans agreed to a rate of 35 percent for the next two years, with an exemption for the first $5 million.
The Senate bill would decrease expected federal revenue by more than $60 billion through the end of 2013, according to the Joint Committee on Taxation, allowing House Democrats to argue against it both on the grounds that it's too generous to the wealthy and that it would add to the nation's debt.
Maryland Rep. Chris Van Hollen, the House Democrats' point person on the tax deal, sees a political advantage in fighting Republicans on that turf — and he has begun framing the numbers as a choice between the Senate deal, favored by Sen. Jon Kyl (R-Ariz.), and the Pomeroy version.
"Are Republicans really willing to hold up tax relief for millions of Americans, middle class Americans and others in order to provide a $25 billion hit to the deficit that benefits 6,600 estates at an average benefit of $1.8 million? We've never had that debate," he said on MSNBC Monday, according to a report in the Daily Caller.
But Van Hollen could face opposition from a variety of factions within the Democratic Caucus, first and foremost Blue Dogs such as Matheson who would eliminate the estate tax altogether. In addition, so-called New Democrats from wealthy coastal districts, some of whom support the deal, could balk at the proposed amendment. And, additionally, it could face opposition from lawmakers who fit into neither camp but want to preserve the agreement to ensure that House-Senate fighting doesn't result in a January increase in everyone's taxes.
Moderate and conservative Democrats voted for the Pomeroy version of the estate tax cut last December — with opposition coming from the liberal wing of the party. That means that it may be a poor guidepost for how Democrats would vote on the same proposal matched up agains the Kyl version. It could be a very close vote.
House Democrats haven't finalized their plans on the estate tax amendments or other potential changes to the bill, which appears headed for easy Senate passage. There could also be efforts to increase tax rates for earnings over a certain threshold. Typically, proponents have aimed at income over $250,000 per couple or $200,000 per individual. But some House Democrats could push for a vote on a hike just for those making more than $1 million.
It's not yet clear which day the House would take up the tax proposal. Along with legislation funding the government beyond Dec. 18, it is one of the last must-pass items before Congress can adjourn for the year.
PoliticoBy: Jonathan Allen