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Obama, GOP Reach Tax Cuts Deal

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Bowing to Republican demands for a two-year extension of all the Bush-era tax cuts, President Barack Obama on Monday night dismissed Democratic complaints about his deal with the GOP, calling the prospect of a protracted political battle a mistake.

Obama cut the deal with Republicans after several days of behind-the-scenes negotiations that involved no House or Senate Democrats. In exchange for a 13-month extension of unemployment insurance and a handful of other Democratic tax proposals, Obama agreed to the two-year extension of the tax cuts — as well as a GOP demand to include a two-year exemption from the estate tax for estates worth $5 million or less.

In a speech Monday evening broadcast on all news channels, Obama brushed aside Democratic complaints, saying, “I am not willing to let working families in this country become collateral damage in political warfare here in Washington.”

But the scope of the deal received a cool response from Democrats — even those like Senate Majority Leader Harry Reid (Nev.) who had long warned a short-term extension of all the cuts was likely necessary.

“Now that the president has outlined his proposal, Senator Reid plans on discussing it with his caucus tomorrow,” Reid spokesman Jim Manley said simply in a statement following Obama’s address.

In his statement, Obama sought to characterize the agreement as a necessary evil to break the partisan logjam over taxes.

Pointing to two failed votes on extensions of only the middle-class tax cuts, Obama argued that “Republicans will block a permanent tax cut for the middle class unless they also get a permanent tax cut for the wealthiest Americans. ... Without a willingness to give on both sides, there’s no reason to believe that this stalemate won’t continue well into next year.”

Obama said that while he would prefer to continue fighting Republicans, he sees no value in waging a symbolic war.

“Sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do. The American people didn’t send us here to wage symbolic battles or win symbolic victories,” he said.

But convincing Democrats in the House and Senate will likely be more difficult.

In the Senate, while most Democrats had come to terms with the reality that they could not pass middle-class tax cuts alone, numerous Democratic aides said the agreement went far beyond what had been expected, particularly the inclusion of the estate tax language.

Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.), who has been a vocal leader of Democratic opposition to a deal, said Saturday he was not ruling out fighting back, even if it means letting the tax cuts lapse at the beginning of next year.

“There’s lots of people in our caucus who have that appetite,” he said.

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