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WASHINGTON— House Democrats voted Thursday to reject President Barack Obama’s tax deal with Republicans in its current form, but it was unclear how significantly the package might need to be changed.
By voice vote in a closed caucus meeting, Democrats passed a resolution saying the tax package should not come to the House floor for consideration as written, even though no formal House bill has been drafted. Rep. Peter DeFazio, D-Ore., introduced the resolution.
Said Rep. Lloyd Doggett, D-Texas: “If it’s take it or leave it, we’ll leave it.”
Rep. Jim McDermott, D-Wash., said “it’s a pretty clear message. We don’t like the bill.”
The vote will at least temporarily stall what had seemed to be a grudging Democratic movement toward the tax package. Before the caucus vote took place, House Majority Leader Steny Hoyer said Obama’s tax compromise embodies “the objective we need to reach” even though Democrats dislike several components.
“We’re going to have an increase in taxes on working Americans ... if we continue to have gridlock,” Hoyer, a Maryland Democrat, said on MSNBC.
But the voice vote in the caucus was quite lopsided. Rep. Shelley Berkley of Nevada told reporters afterward that “one person voted against it. That would be me.”
Asked what happens next, Rep. James Clyburn of South Carolina, the No. 3 person in the Democratic leadership, said, “I don’t know. Well wait and see.”
Speaking earlier Thursday at a White House event promoting American exports, Obama said the vote will determine whether the economy “moves forward or backward.”
The president again pressed Congress to pass the agreement, saying it has the potential to create millions of jobs. He said if it fails, Americans would see smaller paychecks and fewer jobs.
But Rep. Chris Van Hollen, D-Md., said “the jury is still out” on the measure’s enactment because many Democrats are furious over an estate tax provision.
Obama agreed to exempt the first $5 million of a deceased person’s estate, and to tax the rest at 35 percent. Congressional Democrats had expected a 45 percent tax rate on anything above $3.5 million. Without congressional action, the estate tax will revert to an even higher rate: 55 percent on estates valued above $1 million. That should have strengthened Obama’s hand when negotiating with Republicans, Van Hollen said.
Some Democrats have reluctantly embraced the tax package, which would let rich and poor Americans keep Bush-era tax cuts that were scheduled to expire this month. Even so, 54 House Democrats wrote a letter to House Speaker Nancy Pelosi saying they’re opposing the deal.
Led by Rep. Peter Welch of Vermont, they said they were against “acceding to Republican demands to extend the Bush tax cuts to millionaires and billionaires.”
“We’re paying a king’s ransom,” Welch said in an interview. “We didn’t need to and couldn’t afford to.”
The 54 Democrats, by themselves, would not be enough to block the package in the House, depending on how much support it gets from Republicans.
After Obama publicly defended the plan for a third day Wednesday, and Vice President Joe Biden met with Democratic lawmakers in the Capitol for a second day, several Democrats predicted the measure will pass, mainly because of extensive Republican support.