Blue Dogs Threaten Revolt Over AMT

Posted December 18, 2007 at 6:42pm

House Democratic leaders on Tuesday mulled moving an alternative minimum tax reform in two stages — completing work in the second half of the 110th Congress — as members of the fiscally conservative Blue Dog Coalition threatened rebellion if the legislation violates House spending rules.

House Ways and Means Chairman Charlie Rangel (D-N.Y.) said on Tuesday that he favors implementing a tax reform bill in coming days, even if the measure does not comply with the House’s “pay-as-you-go” requirements, which require that any decrease in federal revenue is “paid for” with a correlated increase in taxes or budget cuts.

“The Blue Dogs seem committed to not increasing the deficit,” Rangel said, but added: “I don’t think the voters would understand the problem.”

The New York lawmaker said that rather than have additional taxpayers hit with the AMT in the current tax cycle, he would pass the tax reform now and have the House return in 2008 to pass additional legislation that would offset the reform.

Members of the Blue Dogs acknowledged that Democratic leaders had raised such a possibility during an extensive meeting Tuesday morning.

“Leadership has suggested we make it up next year,” said Rep. Jim Cooper (D-Tenn.), a Blue Dog member.

Blue Dog lawmakers staged a pre-emptive revolt Monday night on the House floor, threatening to keep the chamber in session indefinitely and defeating a leadership motion to adjourn.

Members of the Blue Dogs continued to meet in private at press time Tuesday and had not announced whether they would back the leadership proposal.

“All options are still on the table,” said Rep. Mike Ross (D-Ark.), a Blue Dog co-chairman. “I’m confident the Speaker will not bring a bill to the floor that’s not paid for,” Ross said earlier in the day.

“We’re prepared to be here Christmas Eve, Christmas Day. We’re fine with that,” he said. “We keep hearing the Senate’s in a rush to leave, we’re not.”

But Ross did dismiss as “just a rumor” one suggestion that the House would take up an AMT bill on suspension — effectively circumventing House PAYGO rules.

The Senate was expected to defeat an amendment Tuesday night that would meld the AMT reform into a year-end omnibus spending package, returning the issue to the House, which has twice passed versions of the legislation that comply with PAYGO.

But the House now is expected to take up a Senate version of the tax legislation that does not include any offsets. In exchange, House lawmakers would refuse to take up additional tax legislation in the second half of the 110th Congress until implementing offsets designated to pay for the AMT fix.

However, House Majority Leader Steny Hoyer (D-Md.) expressed less confidence Tuesday than in recent weeks that an agreement could be reached before the 110th Congress adjourns its first session. Asked about the legislation’s prospects at his weekly press conference, Hoyer said only: “Maybe.”