Theodore's World: House, Senate Democrats Derail Package of Tax Cuts

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September 30, 2008

House, Senate Democrats Derail Package of Tax Cuts

House, Senate Democrats derail package of tax cuts

The Hill

A blowup between the Senate and conservative House Democrats has derailed a package of tax cuts, including tax incentives for renewable-energy production, which Democratic leaders hoped to count as a major accomplishment.

House Majority Leader Steny Hoyer (D-Md.) bluntly told Democratic Senate leaders to show some backbone and stand up to Republicans who oppose the House version of the tax package, which includes offsets.

“We’ve been willing to compromise on everything, but not on fiscal sanity. That is why we ask Senate Democrats to stand up to the Republican minority,” said Hoyer.

But Senate Democrats fired back at their Democratic colleagues in the House, accusing them of taking too adamant a stance in the face of overwhelming opposition.

Senate Majority Leader Harry Reid (D-Nev.) pleaded with House Democrats to understand his difficult position: a slim majority, procedural rules that empower minority opposition, and the regular absence of three members of his caucus.

“I do not have the strength and the power — legislatively, procedurally — that they have in the House,” said Reid on the chamber floor.

“My majority is extremely slim, 51-49, when everybody is here,” he said. “I just beg my House colleagues to understand, this isn’t something that we are trying to surprise them with.”

House Democrats, led by Hoyer and members of the conservative Blue Dog Coalition, flatly rejected a Senate package that included energy tax relief extensions, business tax relief extensions and an extension of Alternative Minimum Tax relief.

Senate negotiators combined those tax breaks with disaster relief, mental health parity legislation and a bill to help rural schools.

The unexpected hard-line stance taken by House Democrats caught their Senate counterparts by surprise. Most painfully for Democratic leaders, the flare-up threatens renewable-energy tax breaks, which they hoped to count as a significant achievement of the 110th Congress.

“It’s unthinkable to leave town without renewing the tax extenders for renewable energy,” said Sen. Byron Dorgan (N.D.), chairman of the Senate Democratic Policy Committee.

A Democratic lobbyist said leaders had hoped their candidates would be able to tout the renewable-energy tax breaks on the campaign trail.

“They want to go home and campaign on that,” said the lobbyist.

A victory on taxes would have helped offset the loss they suffered on offshore drilling.

Congressional leaders this weekend sent to President Bush a $630 billion stopgap spending measure that lifted the congressional moratorium on offshore drilling.

Conservative Democrats balked at the Senate-crafted package because it failed to offset the cost of many of the tax-relief extensions, said a senior Democratic aide. The Senate bill would cost $107 billion over 10 years.

Sen. Ron Wyden (D-Ore.), a member of the Senate Finance Committee, said House Democrats should accept the Senate package because it passed by an overwhelming vote in the upper chamber and Bush has promised to sign it. He noted that Bush has vowed to veto the House alternative package.

House Democrats wanted to help pay for the proposals in their package by closing what they call tax “loopholes” for hedge fund managers.

“That’s why we ask Senate Democrats to stand firm against the Republicans insisting on the principle that we must finance tax cuts with debt,” Hoyer said.

The derailment of the tax package also threatens to subject tens of millions of Americans to higher Alternative Minimum Tax (AMT) rates next year, a scary political scenario for many Democrats who represent higher-income areas of the nation, such as the Northeast, that would be the hardest-hit.

Sen. Jon Kyl (Ariz.), the Republican whip, told The Hill that Republicans would not support AMT relief legislation if it were separated from the larger package.

Senate Republicans have refused to consider any alternative to the carefully negotiated package of tax cuts that it sent to the House early Monday.

Reid told his House counterparts that, otherwise, he would accept their proposal to break the tax package up into smaller pieces.

“If it were up to me, I would accept this in a second,” said Reid.

But House Democrats are getting sick of the Senate’s hardball tactics.

Citing an attempt earlier in the 110th Congress to force House Democrats to accept a Senate-drafted surveillance bill without changes, Hoyer said his colleagues are not going to let themselves be jammed again.

“We’ve seen it before. Some of you remember FISA — the message was the same, ” said Hoyer, in reference to an overhaul of the Foreign Intelligence Surveillance Act. “Legislation by blunt force is not the way, as I said, we ought to proceed.”

Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, said that House Democrats may be more open to compromise in the wake of the defeat of a $700 billion Wall Street bailout package, which sent the stock market plummeting more than 700 points.

Economic experts warn that millions of Americans could lose their jobs if a rescue plan doesn’t pass.

Baucus predicted that House Democrats would be more amenable when faced with the prospect of letting tax breaks expire while the nation’s economy teeters on the brink of recession.

“There are more dynamics in play now,” he said, speaking of how the bailout would affect negotiations on tax cuts. “Things are related.”

Wild Thing's comment...........

Cannot quit laughing — The Dem Majority wants them to stand up to the Minority. What am I missing here?

The Blue Dogs are panicked... they're worried about the election. They just helped to shoot down the socialist bailout.

I thought Obama was uniting the libs. They can’t even stand each other. Wow, a bill without any money for a new highway? That might be a first. LOL

You got to laugh. Laugh or go insane. I choose laughter.

Republicans just need to run ads highlighting their experiment with the Democrat Majority has failed miserably and provide the examples.

Americans who earned what they have, are tired of poor decisions by people who default on their mortgages and by the poor decisions made by businesses that lent them the money and we want to save the country from socialism

Posted by Wild Thing at September 30, 2008 04:47 AM


The Dems know they have screwed up. They are facing an election in a month and don't know what the pulse of America is. All they know is that most taxpayers are angry. They wonder who the taxpayers will blame for the mortgage mess. Will they blame Repubs because of Bush, or will they blame Dems who are the majority in Congress? Lots of these Dems now think maybe the should take a noticeable conservative stance to win the votes of their angry taxpaying voters.

They also have to wonder how many non tax paying government subsidized people are in their districts and how many of these bums will make it to the polls to support their Dem. Sometimes it is very difficult to be a flip flopping, wishy washy, lying Democrat politician.

Posted by: TomR at September 30, 2008 07:47 AM

Yesterdays historic House VOTE proved to me there's a FEW democrat and republican CONSERVATIVES with a CONSCIENCE, and realize WE THE PEOPLE do live within our means... a FEW of US! "Psssst....Hey buddy, can ya spare a dime, er MORTGAGE PAYMENT!"

Posted by: darthcrUSAderworldtour07 at September 30, 2008 10:05 AM

McCain is still kicking the Republicans around for voting against the bill. Tom Tancredo voted for it. Both Colorado Democrat congressmen voted against it. I would have voted against it. Guess I'm hopelessly at sea. Leaderless.

They're going to move to the Senate to try to ram it through. Great! I can't wait to hear from Ron Paul on this.

Posted by: Horace at September 30, 2008 11:40 AM

RON PAUL (on Glenn Beck show yesterday): "When the dollar goes, that will go quickly. I mean, the Soviet system ended rather quickly, you know. And that was an economic event. It wasn't a political event or an invasion by the United States."

In my opinion Reagan lured the Russians into spending themselves into bankruptcy with the Arms Race in the Cold War. I was making Pershing II missiles that we knew were only a bargaining chip in the SALT talks to be scrapped as our part of the deal. They cost a lot of money but Russia collapsed.

The Democrats, with minimal resistance from Republicans, spent America into bankruptcy with the kind of mortgage loans that my city is full of, NINJA mortgages. That stands for No Income, No Job, No Assets. Phony appraisals and phony mortgage applications ensured a home for everyone. Go to Green Valley Ranch near Denver Airport and you can see the foreclosed, almost new homes sitting empty. A couple, both active duty Air Force, were sold the house across the street from me for $258,000. The bank took it back and it is sitting begging for $190,000.

In all the criticism on TV nobody ever seems to mention the Real Estate Industry which put together the overpriced mortgages. Merciless, vicious grinders of the faces of the poor. Oh, I forgot, all the agents and brokers are just housewives trying to bring in a second income and help everyone realize the American Dream. Yeah.

Paul also said that only a few Congressmen were allowed into the inner circle to discuss the Bailout plans and that he of course wasn't one of them. Not surprised.

Posted by: Horace at September 30, 2008 12:11 PM

Well at least those women in the Real Estate business are working. I am really tired of hearing how all these people got tricked into buying an expensive house.

If these people can't read the paper they are signing then they don't deserve the house in the first place. If they don't have a job they don't deserve a house, it they don't put up a down payment they don't deserve a house, they should be kept from owning a house until they can take the responsibility of ownership seriously. and THAT MEANS PAYING THE DAMN PAYMENT EVERY MONTH.

The democrats are the ONEs behind this mess, and especially Bill Clinton and the Black Caucus and Jimmy Carter. All this Fair Housing crap.

I was hearing for quite awhile about Balloon Mortgages, well again, didn't you read the paper you signed ? Yes they say but didn't understand what it meant. Well these assholes got a big enough mouth when they want a free lunch, why in hell didn't they ask , Hey, Mr. Banker, what is a Balloon Mortgage ? This shit isn't rocket science. More like common sense.

Bush tried at least a dozen times to fix this stupid mess and was bucked by the democrats each time he tried. Because it would interfere with their free hand-out to new voters. But the biggest slap in the face are the thousands of Illegal Aliens who got houses and are not paying their mortgages, for what ever reason. And guess what folks, we are going to pay for this. When the hell are we going to wake up.

These losers want 40 million more illegals ? It's time to shut down Washington. The national debt is now up to 13.3 Trillion dollars...$13,300,000,000,000 our great grand children will be paying for this mess.

The Republicans are guilt free on this one. Barney Fwank, Pelosi, Reid, and the rest of these scumbags is why we are in this mess.

It is time to throw these morons out.

Posted by: Mark at September 30, 2008 04:05 PM

Tom,........ "Sometimes it is very difficult to be a flip flopping, wishy washy, lying Democrat politician."............

Good one!! Yes it must be a hard job, glad I would flunk at being a dem politician, I would have to write down my last flip so when I flopped it would a different response. haha I think I would have trouble keeping track.

Posted by: Wild Thing at September 30, 2008 04:39 PM

Darth, I think so too. I was shocked actually to see the dems that said no way and the speeches they gave. Label me surprised. haha

Posted by: Wild Thing at September 30, 2008 04:41 PM

Horace, yes I would like to ring McCain's neck.

He knows 77% of American's maybe even more by today do not want a bailout. There have been several guys that have come on Fox Business today with Cavuto and they all saying the same thing. NO to Bailout, that the market will work this out, and how America has had hard times before and always survived and found ways to recover.

Posted by: Wild Thing at September 30, 2008 04:49 PM

Horace I am pretty much like that here. We had one vote against it which shocked me he finally came through.

We'll stick together Horace and just hope and pray more turn conservative or someone runs sometime that is one for our State guys.

I just wish McCain would see the light on this. He would be so awesome if he did and he would really go after Pelosi etc. too. ( dream here )

Posted by: Wild Thing at September 30, 2008 04:53 PM

Mark, sheesh isn't that something. My gosh, that paper and all house stuff is number one with us. I would be terrified not to know where things like that were so I could get to them immediately.

Your sooooo right Mark, "democrats are the ONEs behind this mess, and especially Bill Clinton and the Black Caucus and Jimmy Carter. All this Fair Housing crap"....DITTO that.

I almost pity the next person I meet that tries to say the Republicans did this. I am sooo loaded with ammo about this stuff now. It took me awhile to understand it, but wow once it was clear I got even more upset.

Posted by: Wild Thing at September 30, 2008 04:57 PM

I totally misread McCain when he froze the campaigning and went to D.C. I thought surely he was bucking Bush and would save us from that atrocious bill but it turned out to be other Republicans and a bunch of Democrats who did it. What do I know?

Does anybody know the name of the Republican congressman from California who took Chris Matthews apart on his show last night? I just saw the end of it when Matthews accused him of being disloyal to his party leaders. What I saw and heard then was classic. He stifled Matthews completely which is a real accomplishment. Wish I knew that dark-haired, Caucasian, young, fresh looking chap's name. He's a comer. And from CA no less.

Posted by: horace at September 30, 2008 06:32 PM

I think most folks don't realize that GW in 2002 was pushing housing for all Americans with low cost loans. He also said if a down payment was a problem they had a program to handle that as well. The more I hear and learn about GW who I voted for twice, the more pissed off I get. He was also a big supporter of Fannie/Freddie and praised their leadership. Just so you know, I heard the recordings this morning. Of course the toe tag dimbocrats were all being paid off so there is plenty of blame to pass around. The bottom line is, we need a solution and not a bailout. Wall Street should not get off scott free and the Feds had better not issue a blank check. If that happens, me and my Mossberg are gonna be making plans.

Posted by: cuchieddie at September 30, 2008 07:37 PM

Horace I will try to find out, I missed his show tonight. I am so glad someone stood up to Chris Matthews.

I agree with you abuot McCain, I am very disappointed, he had such an awesome opportunity to do the right thing. Like a guy in a white hat riding in to town to take out the bad guys and instead he agreed with the bad guys. waaaaaaaaa

Posted by: Wild Thing at September 30, 2008 11:37 PM

Cuchieddie, I agree, and thanks, this whole thing is dirty from the get go. I want the guilty to be punished and I don't care what level they are in our government or those stupid companies. And they better not do this bailout grrrrrrrrrrr.

Posted by: Wild Thing at September 30, 2008 11:40 PM

Some friends and I talked today about the fact that McCain never blows up any more. One of them reminded me of my favorite question about anyone who changes their behavior or acts uncharacteristically. To wit: "What mood altering chemicals do they consume?" Does anyone know if John is on tranquilizers? He sorta acts like it.

Posted by: Horace at October 1, 2008 08:59 PM

Horace, I haven't heard anything about that. I noticed he has had more energy and smiles more and I figured it was due to the response that Palin has been getting at her Rally's and the ones she does with McCain.

Posted by: Wild Thing at October 1, 2008 11:22 PM

Of course, you're right Chrissie. Sarah Palin could both gentle and energize at the same time any old man. LOL.

Posted by: Horace at October 2, 2008 10:10 AM