Spokane7
50°
December 8, 2010 in Nation/World
Tax defeat could trigger new recession, WH warns
Vice President Joe Biden, left, and House Speaker Nancy Pelosi talk as they leave a Democratic Caucus meeting on Capitol Hill in Washington, Wednesday, Dec. 8, 2010.
(Full-size photo)
WASHINGTON — Raising the direst alarm yet, the Obama administration warned fellow Democrats today that if they defeat the big tax-cut compromise detested by many liberals, they could jolt the nation back into recession.
President Barack Obama appealed anew for Congress to “get this done” and insisted that more congressional Democrats would climb aboard as they studied details of the $900 billion year-end measure. Several did announce support today, but at least one said there still was “a mood to resist.”
One Democratic opponent, Rep. Barney Frank of Massachusetts, forecast a result that would abruptly reverse Congress’ voting pattern of the first two years of Obama’s term: “It will be passed by virtually all the Republicans and a minority of Democrats.” He said he would vote against it.
Larry Summers, Obama’s chief economic adviser, told reporters that if the measure isn’t passed soon, it will “materially increase the risk the economy would stall out and we would have a double-dip” recession. That put the White House in the unusual position of warning its own party’s lawmakers they could be to blame for calamitous consequences if they go against the president.
With many House and Senate Republicans signaling their approval of the tax cut plan, the White House’s comments were aimed mainly at House Democrats who feel Obama went too far in yielding to Republicans’ demands for continued income tax cuts and lower estate taxes for the wealthy.
Obama says the compromise was necessary because Republicans were prepared to let everyone’s taxes rise and to block the extension of unemployment benefits for jobless Americans if they didn’t get much of what they wanted.
Economists say the recent recession officially ended in June 2009. But with unemployment at 9.8 percent, millions remain out of work or fearful of losing ground economically, and the notion of the nation falling back into a recession would strike many as chilling. It also could rattle markets and investors.
The deal Obama crafted with Senate Republican leaders would prevent the scheduled Dec. 31 expiration of all the Bush administration’s tax cuts enacted in 2001 and 2003, even though Obama had often promised to end the cuts for the highest earners.
Summers’ remarks contrasted with Obama’s comments at a news conference Tuesday. “We don’t have the danger of a double-dip recession,” the president said then, noting the impact of the 2009 stimulus bill and other measures meant to steady the economy.
Obama again urged unhappy Democrats to swallow the compromise, and denied that he went overboard to appease Republicans. “I think it is inaccurate to characterize Democrats, writ large, as quote-unquote betrayed,” he said today.
He said a number of Democrats “have said this makes sense. And I think the more they look at it, the more of them are going to say this makes sense.”
Three straight days of multi-pronged White House efforts to weaken Democrats’ resistance did appear to start having the desired effect.
“In my opinion, a strong leader is one who knows when to compromise,” said Rep. Michael E. McMahon, D-N.Y., in announcing his support for the plan.
Frank, still an opponent, said Democrats under House Speaker Nancy Pelosi do not subscribe to former GOP Speaker Dennis Hastert’s policy of passing major bills only if most of his party’s members supported them. Such a stance, which essentially renders the minority party irrelevant, “is very antidemocratic, hyperpartisan,” Frank said.
House Democrats, who will lose their majority in January, still hold a 255-179 edge in the current Congress. To pass a big bill with mostly Republican votes would mark a dramatic departure from recent battles, such as the health care overhaul, which was enacted with virtually no GOP support in either chamber.
Pelosi and other House Democratic leaders continued to remain outwardly neutral to the tax cut compromise, criticizing some aspects but stopping short of urging or predicting its demise.
For a second straight day today, Vice President Joe Biden traveled to the Capitol to meet privately with Democrats — this time in the House, after visiting senators on Tuesday. Aides distributed a color-coded chart labeled “what we got,” and “what they got,” indicating that Democrats won more concessions in the tax deal than did Republicans.
House Majority Leader Steny Hoyer, D-Md., said he still had reservations about the package, indicating he hopes changes are made before the Senate acts.
“We’ll see what the Senate passes,” Hoyer said.
Biden took a tough stance, warning that any changes might unravel the compromise plan, said several House Democrats who attended the meeting. “The vice president said, ’this is the deal, take it or leave it,’” said Rep. Henry Waxman, D-Calif.
The White House ballyhooed almost any elected Democrat who endorsed the tax plan, with no state or city too small to justify a press release. Vermont Gov. Jim Douglas and Charlotte, N.C., Mayor Anthony Foxx were among those praising the plan, the White House announced.
But many House Democrats were unmoved. They particularly criticized Obama’s proposed estate tax rates, which are far more generous than most Democrats had expected. The concession seemed gratuitous, said Rep. David Price, D-N.C. For now, he said, “there’s a mood to resist” the overall package.
Also, a co-leader of Obama’s deficit-reduction commission said he was deeply disappointed that the tax agreement includes no firm commitment for long-term federal fiscal restraint. Erskine Bowles, a chief of staff in the Clinton White House, made the remarks at a Wyoming event.
Passage of Obama’s plan seems more assured in the Senate, where numerous Democrats have agreed that the president had little choice in making the compromise with Republicans. Still, Majority Leader Harry Reid, D-Nev., said he and colleagues are considering possible changes, and action could come within days.
Changes designed to ease some Democrats’ concerns might include a provision for bonds to help state and local governments pay for construction projects, tax breaks for wind power and clean-energy subsidies, lawmakers said.
© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Ancient Roman wrecks found in deep water 
hawken on December 08 at 5:12 p.m.
In the future, when you see me refer to “far left liberals”, as I have done so many times in the past…. maybe you will better understand… It’s not at all a hateful term that I use…. it’s accurate and descriptive.
Liberals have such a rabid, blind, hate for successful people, they would risk sinking the whole nation into a double dip recession, if they are not allowed to punish wealthy, productive Americans.
They are quite easy to recognize by their posts.
Sometimes, I think that Barney Frank and Bernie Sanders are actually posting on this blog,,, using different names of course, at different times.
eagleproducer on December 08 at 5:21 p.m.
As opposed to the “old” recession?
Please.
As for Barney Frank posting on these threads, Hawken: You wish!
DeCaYeD on December 08 at 5:24 p.m.
It does not matter if this passes or not. This will have no impact on the whole American is in. We have only seen the tip of what is going to come…if we have even seen that.
schleufer on December 08 at 6:13 p.m.
Here is a new saying for the republicans “you can have those tax breaks for the rich when you pry them from my cold dead fingers”. I can see it all shaping up…no matter what happens the republicans will say because of these breaks that is what saved the country and that is why people should love them and give them even more campaign donations.
dotgovguy on December 08 at 6:16 p.m.
Anyone who thought that Barack Obama would bring about “Change We Can Believe In” now knows better. He is simply a hypocrite and a liar, just like the sociopathic Republicans he now panders to. Our nation will be bankrupt before he leaves office.
misteralvin on December 08 at 6:31 p.m.
Hawken you write such crap-incessantly.Your remarks have nothing to do with the column. Don’t you ever take a day off? Who cares what you think anyway- I don’t—you abuse these forums with your endless name calling. You don’t know what all liberals think so how can you generalize about them. You don’t know where they’re all coming from. This is a big country. What seems socialistic or liberal to you can be a mainstream opinion in some parts of the country. Blind rabid hate for successful people? What garbage thinking. Why don’t you keep those remarks to yourself and stop trying to bring down the conversation to your level. Most intelligent people respect other persons opinions even if they disagree with them, right or left. Everyone has some wisdom to contribute hopefully in a civil discussion but try to promote the discussion on the points not your fertile imagination for ridicule or extremism. You don’t speak for liberals - you don’t define liberals. That you hate half the people of this country is not interesting reading. I don’t think socialism is the end of the world or unrestrained trickle down crony capitalism is the answer, but the solutions to the complex economic and political problems of our times will probably be found in a mixture of the two ideolgies like the president is trying to do. However, I think he’s found a really clever but unsound solution here. I would urge people to write their senators over this. And if we have a double dip in the recession it will be the fruit of the right wing agenda announced in 2009 by Rush the high school genius…
PlanB on December 08 at 6:35 p.m.
I’m sure if we lowered the tax rate for the richest Americans to 0 percent, then everything would just be peachy and wonderful as the Bush era tax cuts have proven over the last 10 years.
misjustice on December 08 at 7:27 p.m.
@ misteralvin; you touched on an important point. Contact your representatives to voice your opinion on the proposed compromise. I spent a few hours yesterday doing just that.
It’s easy;
house.gov
senate.gov
whitehouse.gov
Happy writing!
; )
SugarShane on December 08 at 7:30 p.m.
misteralvin, well thought out and informed post, for me, it was better reading than the article.
Dazzeetrader11 on December 08 at 7:37 p.m.
Alvin…it’s always the same but conservatives must keep pounding away. Otherwise libs would give the country away to the Chinese and other socialists like you.
We know we know…Obama’s your special boy and he always is for the underdog and those who sisn’t so well in life. We also know that everyone has been biled out of thier lives by the Republicans.
Grow up! It didn’t happen. SOme work some don’t. some have good luck, some don’t., Some make their own luck…some don’t.
Obamas with his “hopey Changey garbage woke up. He’s got to get back to the middle…why? twofold1. he won’t get re-elected if he doesn’t (unlike you or many like you, he might have noticed the Nov 2 elections) and 2. He’s seen the liberal side and knows it doesn’t work.
SO what’s he done? His version of stimulus didn’t go so well..so he’s trying it our way. Let’s hope this all works. Unemployment should come down quit a bit. He’ll proclaim himself to be a genious even though he stole the ideas.
In the end..it’s not libs or otherwise….far bigger danger is CHina and debt. No fighting allowed. It’s CHina and the huge military presencein th emiddle east. Now..we need industyr to step up and hire people so we can pay off the debt and screw china back into the ming dynasty .
hawken on December 08 at 7:48 p.m.
Daisy… his Obama Care isn’t working so well either….
In the last three weeks the number of waivers given to unions and businesses now is at 222, as reported today…. three weeks ago, it was 111. As I said when it was at 111, I’ll say again at 222…. More to come.
Even his own union supporters can’t afford to pay for it. And they were a primary force behind passage of the bill!
This Obama care boondoggle is being found out for what it is.
I do remember saying…. “We have to pass it before we know what’s in it.” Now, that is typical, liberal governance.
Dazzeetrader11 on December 08 at 8:40 p.m.
It’s the biggest whale of all this Obamacare. $15 trillion. ANd those exempted still want the taxpaqyer to pay for them. With the rate the unions are gaining ground though, soon they’ll be able to buy a company. O is far from out of the woods. He cannot give his plan up or he’ll be consigned to another country. Worst president in memory. The libs are just figure this out? Slowpokes.
force_vector on December 08 at 9:19 p.m.
These “change nothing” tax discussions perplex me. At the end of the day, what we are talking about is not changing anything at all in the tax codes and in exchange extending, yet again, unemployment. Seems like a win-win for both sides, so I don’t get why some are so angry. I understand the “how are we going to pay for it” argument. But where were they the last 4+ years when the government was spending money like there was no end to how much we have? If this all boils down to some philosophical “war”,then perhaps both sides should lay down their arms and simply do what’s right for the economy. After all, Greenspan said it himself, without a bubble, unemployment should be at around 9%. So what are we waiting for? Find the next make believe income source, pretend that all skills are needed, give rich people a tax break for hiring them when they really don’t need them, and we can all be happy with 5% unemployment until the next bust. And then, we’ll do it all over again. Yeah! Sounds like a great plan, doesn’t it?
force_vector on December 08 at 9:31 p.m.
Or…..we could just implement a flat tax with no deductions and be done with the stupidity. That would be far less fun though, since it would deprive Hawken of his internet combat. Highly decorated I’m sure. Just not with a PhD.
schleufer on December 08 at 10:02 p.m.
His Obama care isn’t doing well either? Have you looked to see when that all is supposed to start? Here is an idea. Read that new book deadly spin. Great insight on who the republicans support
misjustice on December 08 at 10:22 p.m.
I think it’s strange that when O’Blame-A fought to end the tax cuts it was the best thing for the country. Now that he has sided with the Republicans and is giving the tax cuts to the country…… it’s the best thing for the country. He also says without these tax cuts it will bring a recession. What changed about it bringing a recession when he wanted to end the cuts? Why will it bring a recession now if the democrats don’t go along with it & it wouldn’t have before?
Also, speaking of ObamaCare. I have an acquaintance that has MS. She is on Medicare (her only insurance). She was just notified that January 1, 2011 she will no longer get her much needed medication through Medicare. She will have to pay for it herself. Each pill is $1 & she takes 2 a day of just one medication. That’s $60 a month for one medication. She is on about 6 different meds. She makes $653.00 a month on Soc Sec. $653.00 - $360.00 will leave her $293.00 a month for food, housing & utilities.
Way to go ObamaCare! Now let’s all read the bill to know what’s in it because it sure isn’t giving EVERYONE insurance like he said it would.
Dazzeetrader11 on December 08 at 10:31 p.m.
It won’t begin Schluef. No money for it. It would be the last nail in the coffin. Socialism ensues when the politicians rob the wealthy. Won’t be much left by the time Obama’s done.
Nobody’s angry…the left just hates Republicans. Nothing constructive just plain hate for America. It’s about change.
It’l take an Herculean change to restore America. It can be done. When people cheer on Wikileakers, something’s very wrong. We have an enemy within. It’ll be a tough nut to get rid of the peoblems.
One thing NOT to do is continue the Socialist experiments. We have it in DC, Olympia and in Spokane. We don’t have time when the world is so hostile to the US. One thing is pretty obvious: we have to save ourselves. Nobody else will. What we’re seeing is a very weak, inexperienced President. he’s still got the shadow cabinet…as if the real one isn’t bad enough.
His weakness has opened the door to financial catastrophe….and what follows? Social deterioration…followed by a light form of anarchy. This is what we’re seeing in DC. Dems are against him as are the Pubs. Even the middle isn’t happy.
he should be resigning soon if he knows what’s good for him. Without a war or something dramatic, he’ll be lucky to finish his term. Just a manipulator of the class warfare…soemthing we can ill afford considering the shape the last guy left the US in.
Tough days ahead.
Scoutster on December 08 at 10:51 p.m.
forcevector…
I do agree that the fundamental issue for both the state and national budgets is our tax structure. Obsolete and unfair.
Regardless of one’s political views, it makes sense to create a more rational and transparent tax system.
misjustice on December 09 at 10:12 a.m.
10:00 a.m. December 9, 2010; this just in…
It was just reported that the Madame Speaker, Nancy Pelosi, will not be bringing the “compromise” to the floor for a vote. Those which control the calendar, control the agenda.
I just called her office, and I e-mailed her yesterday to voice my opinion on the “compromise.”
www.house.gov