AMT Moves Amid Spat

Posted November 7, 2007 at 6:46pm

House Democrats are brushing off a tiff between a party leader and a powerful chairman as they plan to push forward as soon as Friday with a vote on an alternative minimum tax relief package tied to offsetting tax hikes, despite concerns from some members of their Caucus about the political implications of the vote.

Ways and Means Chairman Charlie Rangel (D-N.Y.) on Wednesday dismissed a memo from House Democratic Caucus Chairman Rahm Emanuel (Ill.) to his fellow party leaders that raised the option of dropping tax offsets to pay for the alternative minimum tax. And Democratic leaders continued to voice support for Rangel’s bill and plan to hold a press conference with Rangel this morning, backing his bill in a show of unity.

The Emanuel memo outlines several options for dealing with the AMT and tax extenders bill, Emanuel’s office said Wednesday. “It was a staff-generated memo that laid out options, it did not make recommendations, it did not make suggestions,” an Emanuel spokesman said, describing it as a “routine policy memo to leadership.”

The normally loquacious Emanuel refused to discuss the memo, which was first disclosed by CongressDaily and which his office refused to make public.

Nonetheless, Rangel dismissed Emanuel’s options, noting that what matters is support from Speaker Nancy Pelosi (D-Calif.), who has repeatedly and publicly endorsed offsetting AMT relief and thereby complying with “pay-as-you-go” rules that Democrats have made a cornerstone of their push for fiscal responsibility.

“Rahm has a lot of wonderful ideas,” Rangel said. “When they hit the wall and bounce to the floor, that’s that. It hasn’t got a damn thing to do with the committee. As long as he doesn’t tell anyone, why should I care? His leadership role is being creative. Pelosi’s is making decisions.”

Nadeam Elshami, a spokesman for Pelosi, reiterated Pelosi’s support for offsets. “Democrats believe in tax fairness, providing middle class families with tax relief, and we will do it in a fiscally responsible way, and the [Speaker] has been very clear on that,” he said.

Emanuel’s spokesman reiterated that Emanuel supports Rangel’s bill: “He supports the bill. He voted for it in committee.”

Rangel, meanwhile, defended the offsets, particularly the carrie-interest proposal vehemently opposed by the booming private equity industry. “The carried-interest proposal is on good, solid political ground,” Rangel said. “The ball has been passed over to the Senate.”

But first, Democrats have to vote, and several conservative lawmakers have voiced concerns for months about moving forward with offsets.

“There is a big concern among Members that we’re being asked to vote for something that isn’t going anywhere in the Senate and is not well cooked,” a Blue Dog Democrat said on condition of anonymity.

But Stacey Farnen Bernards, a spokeswoman for House Majority Leader Steny Hoyer (D-Md.), said the nervousness of some Members has been overblown by the press but contained, and Democrats are confident they have the votes.

“Everybody is on the same page,” she said, citing the press conference today which is expected to be attended by Hoyer, House Majority Whip James Clyburn (D-S.C.), Emanuel and Rangel. And she dismissed the flap over the Emanuel memo. “I think that people are making something out of nothing,” she said.

Bernards said there is a chance the AMT could be put off until next week, but not because of angst within the Caucus. The bill only would be put off if appropriations measures take up too much floor time Friday and limit the amount of time available for the AMT.

Also on Wednesday, the Blue Dog Coalition issued a press release reiterating its support for PAYGO rules, including on the AMT, and praised Senate Democrats for recent comments in which they issued a desire to include offsets. But Senate Democrats have refused to back any particular plan at this point and appear hamstrung by the strong opposition of Senate Republicans to include any offsets for the AMT.

House Budget Chairman John Spratt (D-S.C.) also continued to urge his colleagues to stick to the PAYGO rule. “We’ve stood fast for the last 10 months, and I haven’t seen the leadership backing up yet,” Spratt said.