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Obama Steps Up Pressure on Tax Cuts Deal, Citing Economy’s Needs

December 8, 2010 at 3:44 PM EDT
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After President Obama's announcement of a compromise with Republicans on tax cuts and extended unemployment benefits, some Democrats are threatening to filibuster the deal. Jim Lehrer discusses the latest round of volleys on Capitol Hill with Political Editor David Chalian.

JIM LEHRER: The president stepped up the pressure on disgruntled Democrats today to get behind the tax cut deal he struck with Republicans. He insisted again he has not forgotten his principles or his base.

U.S. PRESIDENT BARACK OBAMA: Good morning, everybody.

JIM LEHRER: The event was a meeting with the president of Poland, but Mr. Obama’s focus quickly turned back to defending the tax deal.

BARACK OBAMA: I think it’s worth noting that the majority of economists have upwardly revised their forecasts for economic growth and noted that, as a consequence of this agreement, we could expect to see more job growth in 2011 and 2012 than they originally anticipated.

And I just think it’s very important for Congress to examine the agreement, look at the facts, have a thorough debate, but get this done. The American people are watching, and they’re expecting action on our parts.

JIM LEHRER: The action the president wants would preserve all the Bush era income tax breaks for two years, extend jobless benefits for 13 months, cut Social Security payroll taxes by 2 percent for one year, and cut the top rate of a new estate tax from 55 percent down to 35 percent.

After a day of digesting the deal, a number of Democrats argued it gives too much to the wealthy and adds $900 billion to the deficit.

Outgoing House Speaker Nancy Pelosi said the response wasn’t very good when her caucus met last night.

REP. NANCY PELOSI (D-Calif.), speaker of the House: Well, I think it is fair to say that there is a certain amount of unease with the proposal that was put forth by the president.

JIM LEHRER: Vermont Congressman Peter Welch was even circulating a letter asking fellow Democrats to reject the president’s proposal.

REP. PETER WELCH (D-Vt.): And what the president did in agreeing to the extension of these tax cuts for the wealthy and the very-well-off was essentially leave that fight, leave the field in the seventh inning, when we had much — we had a couple more innings to go.

JIM LEHRER: On the Senate side, Majority Leader Harry Reid suggested action might come quickly, but he said Democrats do want changes in the plan.

SEN. HARRY REID (D-Nev.), majority leader: I’m right where I was yesterday. It’s something we have to work on. I have gotten a lot of input from the caucus. I have gotten — we had White House representatives again there today. They were — they did some good — they did some explanations that I think were helpful to the caucus. So, I’m where I was yesterday. It’s — more work to do is what I said yesterday.

BARACK OBAMA: Take a tally.

JIM LEHRER: On Tuesday, the president used words like sanctimonious and purists to describe his critics on the left.

Today, he rejected any talk that he might be viewed as a turncoat by that side of the aisle.

BARACK OBAMA: It is inaccurate to characterize Democrats writ large as feeling — quote, unquote — “betrayed.” I think Democrats are looking at this bill — and you’ve already had a whole bunch of them who’ve said this makes sense. And I think, the more they look at it, the more of them are going to say, this makes sense.

And Republicans are going to have to explain to the American people over the next two years how making those tax cuts for the high end permanent squares with their stated desire to start reducing deficits and debt. I don’t think that formula works.

JIM LEHRER: Some Republicans said they are concerned that the deal’s not paid for. But, most, like California Congressman David Dreier, appeared ready to support it.

REP. DAVID DREIER (R-Calif.): I’m not happy with every aspect of it, but I think about what could happen if we don’t pass this measure. If we don’t pass this measure, every American who is working that pays income taxes will see a tax increase.

JIM LEHRER: All of which left the president trying to round up enough Democratic votes for passage. He dispatched Vice President Biden to the Capitol again, this time to lobby House Democrats.

And here now is NewsHour political editor David Chalian. David, so where do things stand right now?

DAVID CHALIAN: Well, I think you do have to look at both chambers separately, the House and the Senate. Let’s begin at the House side, because that’s where Vice President Biden went up to today to talk to House Democrats.

Talking to a House Democratic source inside the room there, said that there is still significant opposition. Most of what the House Democrats stood up to talk about to the vice president was in opposition of this deal.

However, this same source said that the vice president made a forceful, coherent argument for the White House position here, which, to me, sounded like there might be some room here to bring some Democrats on board.

Remember, Jim, 63 Democrats just lost their seats, right? A lot of them were Democrats in more moderate or McCain-winning districts. They’re more Blue Dogs. They’re still here for this vote. It’s not the new Congress yet. And, so, you might see a lot of those Democrats that lost their seats in the election actually be the very ones that support the president here in this deal.

JIM LEHRER: And, also, they lost the election. They have nothing further to lose. So, any kind of pressure from any — any larger Democrat isn’t going to really ring true to them, is it?

DAVID CHALIAN: Without a doubt. There’s no ability for sort of the liberal left wing, which is opposed to this deal, to bear pressure on them, because, as you said, it’s a free vote for them.

I also met with a House Republican leader today. And — and he said to me, he said he thinks that a majority of his conference — you just heard David Dreier there — a majority of his conference is going to support this. On the Senate side, we heard Mitch McConnell yesterday say a vast majority of his conference is going to support this.

So, the president looks like he’s going to be able to get this through with a hefty amount of Republican support and enough Democratic support to cross the finish line.

JIM LEHRER: So, there is no sign that this — this thing is not going to pass?

DAVID CHALIAN: I — the Senate, I think, is a pretty safe bet right now that this will get through the Senate. Majority Leader Reid wants to tinker with it. Some members in his caucus are still a little disappointed with it.

But there are enough. And the White House is pumping out — every minute another Democrat announces their support for it, they’re making sure every reporter in town knows. But there is enough moderate, centrist Democratic support there, that I think they’re safe there.

The House is very interesting, because, although I do think they will get the votes at the end of the day, it’s going to be, I think, a closer vote and a tougher vote. And the Republicans are going to have to hang on.

If you hear from people like Sarah Palin today, already dissing this deal, well, if conservative leaders start getting too concerned and publicly opposed to it, because it does add to the deficit, because the tax cuts for the wealthy are not permanent, and if some of those House Republicans start to buckle, there’s not a very big cushion among the Democrats for the president.

JIM LEHRER: What’s the current reading on what kind of blood is still going to be on the table if it passes, Democratic — liberal Democratic blood, over this?

DAVID CHALIAN: The president is going to have his work cut out for him to take care of and tend to his base.

There is no doubt that he has upset his base in a significant fashion here. And I don’t think it’s going to be all that easy for him to repair it. However, he’s got a two-year election cycle ahead of him. And there’s plenty of time to repair the work with the base.

What they’re probably — in talking to White House aides, my sense of their political calculus, what there was no time for was any more erosion in the middle. And I think that they made a calculation here that the president in 2008 campaigned, and a key component of that campaign, of the brand, the Obama brand, was that: Washington’s broken. I’m going to get there. I’m going to get both sides to agree on big issues, and we’re going to do the work of the American people.

He himself has said that one of his big regrets thus far has been that he hasn’t been able to come through with that, that he hasn’t been able to change the way Washington works. And that’s why you saw him so passionate at that news conference yesterday, Jim, because he wanted to get out there and reclaim a bit of that brand that says, I have — we have got to put the politics aside. I’m here making sure we get a deal for the American people.

JIM LEHRER: And, yet, as we saw in the — in the clip here, the president today said, OK, all right, we may lose it now, but we’re going to fight again in two years on this whole tax — on particularly tax cuts for the wealthy.

DAVID CHALIAN: Right. Now, his liberal base says, well, why do we believe you now?


DAVID CHALIAN: You have just — you said you were going to fight for it this time around, and you didn’t.


DAVID CHALIAN: But the White House, in talking to aides there, they’re eager to have this as a central fight in that 2012 reelection fight.

So, I do think you are going to see him re-litigate this matter, obviously, with the hopes on their part that the economy will be in better shape, negating that argument that it’s still too bad of an economy to have taxes go up.

JIM LEHRER: OK. Well, we have got a little more time to talk about it between now and then.

DAVID CHALIAN: That we do.

JIM LEHRER: OK. Thanks, David.