POLITICS

Congress Skeptical About Obama's Tax Cut Summit, Schumer's $1 Million Proposal

11/30/2010 08:21 pm 20:21:47 | Updated May 25, 2011

WASHINGTON -- Faced with a tough decision to make on the expiring Bush tax cuts, Congress and the White House did Tuesday what they do best: They passed the buck.

With the resolution to a fight Washington has known was coming for 10 years still hanging in the balance, a small group of legislators will meet with top executive-branch officials, including Treasury Secretary Timothy Geithner and Office of Management and Budget Director Jacob Lew, sometime this week -- perhaps as early as Wednesday -- to hammer out a deal.

The lawmakers slated to attend include Senate Finance Chairman Max Baucus (D-Mont.) and Rep. Chris Van Hollen (D-Md.), likely the next ranking member of the House Budget Committee; from the other side of the aisle, Senate Minority Whip Jon Kyl (R-Ariz.), the ranking member of the taxation subcommittee, and Rep. Dave Camp (R-Mich.), the top Republican on the powerful House Ways and Means Committee.

There wasn't much confidence expressed Tuesday in their ability to forge consensus.

"I'm skeptical," said Sen. Carl Levin (D-Mich.), citing Senate Minority Leader Mitch McConnell's statement that his top priority is to oust President Barack Obama in 2012. "That creates a real barrier, it seems to me."

As long as McConnell and his fellow Republicans see compromise as a boon to Obama's political fortunes, a deal may be impossible, Levin said. But, he added, "if he wants to succeed, he is going to have to get beyond that. He is going to have to help us succeed as a country. And if the president is a beneficiary of the country's success, then he has got to accept that."

Hill aides say Republicans appear to hold most of the cards heading into the talks. While Obama has the loudest megaphone in the tax-cut debate, he's outsourced his role to Lew and Geithner. That GOP lawmakers would feel emboldened with the president out of the picture was a major concern for Democratic aides in the hours after the summit idea was proposed. Another fear: High-stakes talks -- in which blame for caving could be acutely directed to a solitary lawmaker -- may compel both sides to dig in and not budge.

Each party certainly exhibited a bit of recalcitrance in the immediate aftermath of the summit announcement. A GOP source, privy to the meeting Obama held with congressional leadership earlier in the day, let it be known that, in the source's words, incoming Speaker John Boehner (R-Ohio) believed there was "no substitute for immediate action to cut spending and stop the coming tax hikes for all taxpayers."

"If [Republicans] were serious about bringing down that deficit, then they have to look at [letting tax cuts above $250,000 expire] as one of the options," Sen. Amy Klobuchar (D-Minn.) said on her way out of a caucus meeting later in the day.

Even the prospective tax-cut compromises drew criticism on Tuesday. White House Press Secretary Robert Gibbs was asked during his daily press briefing to address a counterproposal, championed by Sen. Chuck Schumer (D-N.Y.), that would raise taxes only on individuals earning $1 million or more per year, rather than $250,000.

"Does that have shades of a compromise?" Gibbs was asked.

"I don't, quite frankly, see that it has," he replied. "I don't see that it has moved any Republican, and I think the president has restated the case today for a $250,000 threshold for those filing together."

Others on the Hill echoed Gibbs -- worried, it appeared, that to raise the threshold would be to redefine the middle class as those making $1 million or less.

"I'm not talking compromise," said Sen. Jeff Merkley (D-Ore.). "I think we should go to the floor, we should have the vote on $250,000. That is certainly far more than an average working person earns throughout this country."

But, as with most issues put before the Democratic caucus these days, consensus is elusive. While Gibbs was throwing cold water on the idea of raising the taxable income level to $1 million, others were begrudgingly embracing it.

"I believe we ought to have a $250K limit for tax cuts, and if we can't get that done, then we ought to be willing to raise it up to a million," said Levin. "That is my tenth choice. Number one through nine is the $250,000."

Levin argued, however, that such a move wouldn't redefine what constitutes the middle class. "It's just one vote," he said. "I've swallowed it in order to get the middle class tax cut continued. Everything I've swallowed around here doesn't taste good."

Behind the scenes, sources said taking the Schumer approach could be the party's best deal. Conceding to Republican demands for at least a temporary extension of the tax cuts for the wealthy would simply invite similar moves down the road. And while Democrats seem poised to push for other goodies in exchange for their acquiescence -- unemployment benefits chief among them -- allowing a portion of the Bush tax cuts to expire is an important precedent to set. At the very least, it's a sound political move.

"Republicans are worried about this proposal because they know it will expose them as fighting on behalf of millionaires as opposed to the middle class," Schumer spokesman Brian Fallon said.

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