April 19, 2014 SIGN IN | REGISTER

Tax Package Hinges on House

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“We find the Senate bill in its current form unacceptable, and there will be changes made, especially as they relate to the most egregious provisions, like the estate tax, which puts a $25 billion hole in the deficit — $25 billion over two years — to benefit the wealthiest 6,600 estates,” Rep. Chris Van Hollen (D-Md.) said. “At a time when we’re trying to reduce the deficit, it makes no sense to put us into that kind of debt to China for the wealthiest estates. It wasn’t a necessary part of the deal and shouldn’t be there.”

Democrats privately acknowledged they are engaging in a risky gambit: They want to try to avoid blowing up the tax cut bill completely while still attacking — or at least registering their opposition to — the provisions they find most objectionable, such as those dealing with the estate tax. Speaker Nancy Pelosi (D-Calif.) met Monday with Majority Leader Steny Hoyer (D-Md.), Ways and Means Chairman Sander Levin (D-Mich.) and Van Hollen, the incoming ranking member on the Budget Committee, on the issue. But sources said they didn’t settle on a road map for how to handle the package.

One possible strategy is to amend the estate tax language to impose a 45 percent tax on estates worth more than $3.5 million instead of the 35 percent tax on estates worth more than $5 million that the deal calls for. Democratic leaders might not have enough votes for that change but could temper Caucus unrest by giving Members a chance to register their displeasure with the original language.

“The approach here would be to allow Members to weigh in and get on the record on portions of the package that they believe are unwise,” a senior Democratic aide said.

“This is not the best deal we could have gotten, so let’s be on the record on making that clear.”

A Democratic leadership aide blamed the White House for not doing enough to bolster the Democratic narrative on extending the tax cuts.

“One of the main frustrations is that the White House failed to effectively define the debate and differentiate the Democratic position from the Republican position on this issue,” the aide said. “So making changes to the package would allow House Democrats to better define the debate in ways that the White House failed to.”

Such an approach would mimic one House leaders took earlier this month when they held a symbolic vote on extending the middle-income cuts. That proposal failed, but Pelosi and other House leaders touted the vote as a measure of their commitment to helping working Americans.

“There’s talk about having an amendment or multiple amendments to address some of the provisions in the package that Democrats have a real problem with,” the senior Democratic aide said.

Hoyer, speaking Monday at the National Press Club, said he remains “hopeful” that the House could wrap up business and adjourn for the year Friday. But he added that the House could make changes to a Senate tax cut bill, forcing it back to the Senate for consideration. 

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