Landrieu noted that the “problem” with the deal as configured is that it likely will not reduce the deficit. The White House would be able to secure about $600 billion in revenue from raising tax rates on incomes over $400,000 for individuals and $450,000 for families, but it would lose just as much through permanent extensions of other measures, such as reducing the reach of the alternative minimum tax. The Tax Policy Center at the Brookings Institution calculated the AMT fix would cost $2.7 trillion from 2011 to 2022.
“The Republicans have refused to allow taxes to be raised on those on the highest levels, they’ve had to concede that point, and middle-class families have been protected, but the deficit is still a problem that needs to be addressed,” Landrieu said.
“The money is not being spent; it’s being given back to middle-class families in the form of tax relief,” the Louisiana Democrat said.
Many aides to other in-cycle Democrats approached for this story did not want to comment publicly on a deal not yet done. But it’s clear the White House and Senate leaders, who seemed resigned to a package of this scope, have some selling to do.
“The White House needs to do a sales pitch,” one Senate source said.