Jittery Democrats jump ship on tax-cut plan

  • Wed Sep 15th, 2010 10:24pm
  • News

Associated Press

WASHINGTON — More Democrats joined Republicans on Wednesday in calling for the preservation of tax breaks for Americans of every income level, bolting this election season from President Barack Obama’s plan to preserve cuts for families who earn less than $250,000 and let taxes rise for the wealthiest Americans.

But Obama placed the blame for the stalled proposal squarely on Republicans.

“They want to hold these middle-class tax cuts hostage until they get an additional tax cut for the wealthiest 2 percent of Americans,” the president said. “We should be able to extend, right now, middle-class tax relief on the first $250,000 of income.”

Nervous Democrats are among those with concerns about the president’s plan.

“We should not be raising taxes in the middle of a recession,” Rep. Jim Marshall, D-Ga., who’s facing tough odds in his bid for a fourth term, wrote in a terse letter to House Speaker Nancy Pelosi.

“It is essential that we keep things as they are in the short term,” said Rep. Travis W. Childers, D-Miss., another conservative incumbent in a tight race, whose district, like Marshall’s, voted for Republican Sen. John McCain in the 2008 presidential race.

For this pair, one press release announcing their opposition to Obama’s plan was not enough. They were two of 31 jittery Democrats who signed a letter urging Pelosi, D-Calif., and Majority Leader Steny Hoyer, D-Md., to abandon the Obama plan and extend to everyone the Bush-era tax cuts due to expire at the end of the year, according to one of its authors, Rep. Jim Matheson, D-Utah.

House and Senate leaders aren’t saying which plan they’ll propose, or whether they’ll even bother with the debate in the charged political atmosphere leading up to the Nov. 2 midterm elections. All 435 House seats, 37 in the Senate and the Democratic majorities in both houses are on the line.

The divisions extended well into Democratic ranks on Capitol Hill. Moderates and conservatives in tight races were skittish about the prospect of being branded tax hikers at the height of election season if a bill to let taxes rise for the wealthy is brought up for debate. Other Democrats said they relish the idea of holding a vote to extend only the middle-class tax cuts and daring Republicans to vote against it.

“I want to smoke some people out,” said Rep. Bill Pascrell, D-N.J., a supporter of the Obama plan who nonetheless said he was open to compromise.

The White House spending wish list

The Obama administration also is pushing a $20 billion-plus pre-election shopping list on its Democratic allies in Congress as they prepare must-pass legislation to prevent a government shutdown next month.

Republicans are protesting the spending requests, which include $1.9 billion for grants to better-performing schools, financial help for the Postal Service and more than $4 billion requested by the administration to finance settlements of long-standing lawsuits against the government.

A tally by Republicans puts the price tag of the Obama requests at more than $20 billion, including $5.7 billion to prevent shortfalls in the popular Pell Grant program next year and permit the cash-strapped Postal Service to delay a scheduled $5.5 billion payment into a health care fund for retirees and use the money to stay afloat.

The White House is targeting a bill to continue funding the government past the Sept. 30 end of the 2010 fiscal year to carry its spending requests. The measure is needed because Congress is failing to pass the annual spending bills that pay for the day-to-day operations of the government.

Some of the proposals, including $1.2 billion to remedy discrimination by the Agriculture Department against black farmers and $3.4 billion to settle claims that the Interior Department mismanaged Indian trust funds, passed the House and Senate earlier this year as part of larger legislation but were stripped out due to cost concerns.

The administration also wants to renew parts of last year’s economic stimulus measure, including $800 million for child care grants to states and $350 million to process a backlog of claims for Social Security disability benefits.