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House Dems Reject Tax Deal, Senate Holds Off on DREAM Vote

President Obama’s compromise with Republicans on a two-year extension of the Bush tax cuts hit a speed bump today: House Democrats took a non-binding vote, where a majority rejected bringing the compromise up for a vote on the House floor.

If House Democrats were to unite against the current compromise, the measure would not pass – meaning the existing cuts would expire, and taxes for all Americans would go up in January 2011.

Several House Democrats have already expressed their support for the deal, so complete opposition unlikely.

If, as party leaders suggest, a majority of the House Republican conference supports the deal, President Obama will only need half the Democratic caucus to pull him across the 218 finish line. That is assuming Speaker Pelosi is willing to buck the majority of her caucus, and bring the bill to the floor despite today’s vote.

The House Democrats decided against voting on the current plan by a voice vote in a private caucus meeting.

Speaker Nancy Pelosi explained the opposition in a statement:

“House Democrats share the President’s commitment to providing the middle class with a tax cut to grow the economy and create jobs. The House passed a bill last week to provide tax cuts for all Americans but not a bonus tax cut to millionaires and billionaires. The extra tax cut for the top 3 percent does not create jobs and increases the deficit. Unfortunately, Senate Republicans blocked the bill from being approved by the Senate.”

Rep. Raúl Grijalva, D-Ariz., co-chair of the Congressional Progressive Caucus, said House members were not included in the negotiations with Republicans.
“The House was not consulted during the negotiations that produced this package, and our support cannot be taken for granted now or in the future,” he said.

The Senate is still considering the tax deal. The compromise would cost about $800-$900 billion and includes a $120 billion Social Security tax break, $56 billion for the unemployment extension and $40 billion in other tax credits, in addition to extending the Bush income tax cuts for everyone. Those tax cuts were enacted in 2001 and 2003, and will expire Jan.1, 2011.

Many Democrats do not support extending the Bush tax cuts for wealthy Americans, counted as those making more than $250,000 a year.

In a busy day on Capitol Hill, the U.S. Senate also voted to shelve the DREAM Act. The House has already passed a version of the bill, which would provide a path to citizenship for children in America illegally if they attend college or join the military.

A Senate aide told NBC News that the Senate will vote on the DREAM Act, as passed by the House, next week. This could give Democrats time to get 60 votes on the measure and overcome a Republican filibuster.

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