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Who Stands in the Way of Obama's Tax Cut Deal?

Obama, taxes, tax cuts

Updated at 1:30 p.m. ET

President Obama yesterday announced that he has reached a tentative deal with some congressional Republicans over how to extend the Bush tax cuts. The negotiations, however, are only just beginning.

Mr. Obama said last night that he agreed to the deal -- which would extend all of the tax cuts for two years, extend unemployment insurance for about a year and cut payroll taxes for 2011 among other things -- because he wanted to end the "stalemate." Yet several House Democrats, some liberal senators, and some Republicans in both the House and the Senate are signaling they could try and block the deal.

Liberals in the House wasted no time decrying the plan as an abandonment of liberal, Democratic principles on the part of the president. They made it clear that House Democrats intend to have their say on the issue.

Rep. Peter Welch (D-Vt.) drafted a letter to House Speaker Nancy Pelosi last night calling the plan "fiscally irresponsible" and "grossly unfair." After circulating the letter among his colleagues late last night, Welch has, as of early Tuesday afternoon, collected signatures from 15 other House Democrats, Welch's office tells the Hotsheet: Raul Grijalva (Ariz.), John Conyers (Mich.), James Oberstar (Minn..), Pete Stark (Calif.), Pete Defazio (Ore.), Chellie Pingree (Maine), John Olver (Mass.), Elijah Cummings (Md.), Bob Filner (Calif.), Judy Chu (Calif.), David Price (N.C.), Donna Edwards (Md.), Paul Tonko (N.Y.), Jim McDermott (Wash.), and Keith Ellison (Minn.).

"We support extending tax cuts in full to 98 percent of American taxpayers, as the President initially proposed," the letter says. "He should not back down. Nor should we."

Welch told the Hotsheet he was pessimistic about changing the deal since President Obama is behind it. "The central and crucial person in this debate is the president of the United States," he said.

He added that Mr. Obama gave up the game in the "seventh inning."

"He could've held on," he said. "It was mobilizing public opinion that we needed the president to do."

In his own statement, Conyers called the deal "legislative blackmail" that "will be vehemently opposed by many if not most Democrats, progressives, and some Republicans who are concerned with the country's financial budget."

Conyers added, "I for one will do everything in my power to make certain that legislation along these lines does not pass during the lame duck session."

The often outspoken Democratic Rep. Anthony Weiner (N.Y.) said in a statement that the American people "see this deal as punting on 3rd down -- it seems the President is not seeing the value of being on offense... Deals come after we fight for ideals -- let's do that first."

Democratic Rep. Jerry Nadler (N.Y.) concurred, Roll Call reports, saying Democrats should be "playing chicken with Republicans, not the other way around."

"The question is if Obama has the same nerve that President Clinton had," Nadler said. "It doesn't look promising."

Rep. Chris Van Hollen (D-Md.), who has represented House Democrats in formal negotiations on the tax issue, gave a muted statement about the deal: "The House Democrats have not signed off on any deal," he said. "We will thoroughly review and discuss the proposed package in the caucus."

House Majority Leader Steny Hoyer said today there is "no consensus or agreement reached by House leaders" on the deal, the Hill reports.

Meanwhile, the deal will face strong opposition on the Senate side as well.

Sen. Bernie Sanders (I-Vt.) said last night he would "do whatever is necessary" to stop the deal. Later on MSNBC, he reiterated that point, coming closer to committing to a filibuster.

"I've got to tell you, I will do whatever I can to see that 60 votes are not acquired to pass this piece of legislation," he said.

"I think it is an absolute disaster and an insult to the vast majority of the American people," Sanders added. "They're talking about more tax breaks for billionaires who don't need it."

Sen. Tom Harkin (D-Iowa) also denounced the plan. "Senate Republicans have successfully used the fragile economic security of our middle class and the hardship of millions of jobless Americans as bargaining chips to secure tax breaks for the very wealthiest among us," he said.

A spokesperson for Senate Majority Leader Harry Reid released a terse statement, saying, "Now that the president has outlined his proposal, Senator Reid plans on discussing it with his caucus tomorrow."

Vice President Joe Biden will join Senate Democrats at their caucus meeting today to defend the agreement.

Yet opposition exists on the Republican side of the aisle as well.

Retiring Republican Sen. George Voinovich (Ohio) said Monday he will oppose legislation to extend any of the Bush tax cuts that does not include an attempt to reform the tax code, the Washington Post reported.

"As I look at my experience, I believe that if this thing goes through and we extend it, we will kick this thing down the road," Voinovich said. "It's completely irresponsible."

There is good reason to believe Voinovich will stick to his word. He was the only Republican senator to oppose the cuts when they were first proposed in 2000, the Post points out, and has bucked his party on other tax cut proposals.

"The American people should know that a lot of the reduction of their taxes is borrowed money from China," he said. "You've got to pay for it. You've got to pay for it. You've got to pay for it."

Rep. Michele Bachmann (R-Minn.), leader of the House Tea Party Caucus, said in a radio interview last night that House Republicans could also oppose the plan because of its cost.

"I don't know that Republicans would necessarily go along with that vote. That would be a very hard vote to take," Bachmann told conservative host Sean Hannity. "I think we're back in a conundrum. I think the compromise would be extending the rates for two years and not permanently, but not tying it to massive spending. We cannot add on something like a year of unemployment benefits."

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Stephanie Condon is a political reporter for You can read more of her posts here. Follow Hotsheet on Facebook and Twitter.
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