Despite Frustration, Dems Seem Resigned to Tax-Cut Bill's Passage

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Pete Souza / The White House / Getty Images

President Obama talks with Republican whip Eric Cantor, left, after a meeting with congressional leaders at the White House on Nov. 30, 2010

Even the wins can seem bruising for Barack Obama these days. In the wake of his tax-cut compromise last week, the President's GOP adversaries lauded the pact loudly enough that the party's rank and file were warned to quit crowing, lest they further rile Democrats convinced Obama got fleeced at the bargaining table. In the Senate, a stirring 8-hr. 35-min. filibuster-like soliloquy by 69-year-old independent Bernie Sanders blasted the logic of what he sees as lining the pockets of the wealthy as the U.S. slouches toward insolvency. A cadre of House Democrats, incensed by the deal's estate-tax provision, seemed on the verge of mutiny; one dubbed the pact Obama's "Gettysburg." And at an impromptu press conference that felt like a flashback to 1995, former President Bill Clinton took the White House podium Friday afternoon to defend the compromise, providing a stark reminder that even if Obama has borrowed a page from Clinton's triangulation playbook, he hasn't sold it with his predecessor's panache.

"It's by no means perfect," Obama said of the deal during his weekly address on Saturday. "And as with any compromise, everybody had to live with elements they didn't like. But this is a good deal for the American people." The bill, on which the Senate is slated to hold a procedural vote Monday afternoon, extends the Bush-era tax rates for all Americans for two years and sets the estate-tax rate at 35% after a $5 million threshold, two provisions that have won Republican support. It also includes an extension of unemployment-insurance benefits through 2011, an array of tax credits and breaks for students, parents and businesses, and renewable-energy incentives. The deal will spare the average middle-class family a $3,000 tax hike, Obama said, and economists estimate it will save the economy more than 1 million jobs.

After a chilly initial reception from Democrats, the White House appears to have garnered enough bipartisan support to secure the $858 billion bill's safe passage through a turbulent Congress. Democratic leaders in both houses signaled Sunday that their caucuses were prepared to swallow the accord's unpalatable provisions to safeguard the middle class and cushion the economy. "We have a good cross section of the Senate Democratic caucus from left to right who are prepared to accept this," Illinois Senator Dick Durbin, the majority whip, said during an appearance on CNN's State of the Union. Chris Van Hollen, the ranking Democrat on the House Budget Committee, told Fox News that despite frustration with the estate-tax provision (which many Dems believe should have a lower threshold and a higher rate), "We're not going to hold this thing up at the end of the day."

Just days after House Democrats held a nonbinding voice vote to document their opposition to the bill in its current form, the tepid appraisals marked real progress. In part, the thaw may be due to a set of sweeteners added to the deal's original framework to attract support from recalcitrant members. The reworked package, released Thursday night, extends two expiring renewable-energy provisions from the stimulus: a tax credit of 45 cents per gallon for ethanol opposed by environmentalists but welcomed in farm states, and a Treasury grant of up to 30% for companies working on projects involving solar, wind and geothermal energy.

Still, several of the green lawmakers who have lobbied for the latter breaks added to the package, known as the section 1603 program, say the additions won't change their minds. "We should be evaluating this solely on the basis of whether we're creating enough jobs to justify this explosion in debt," says Representative Peter Welch of Vermont, whose letter blasting the bill as "fiscally irresponsible" and "grossly unfair" to the middle class was signed by 53 Democratic colleagues. "In my view, the bill as currently designed has too much debt and too few jobs," says Welch, who believes adding "Christmas-tree ornaments" to the package "erodes support and feeds public cynicism."

Representative Jay Inslee, a Washington State Democrat, said the new package was "a pathetic attempt and in no way moves me any closer to supporting it." Several Democrats who spearheaded opposition to the measure told TIME that the inclusion of renewable-energy measures didn't come close to canceling out bitterness over the tax breaks for the richest Americans. "Particularly offensive to people was the estate tax, which I think is such a blatant indication that there is absolutely no limit to the greed," says Representative Jan Schakowsky, a Democrat from Illinois.

Over the past few days, Republicans have studiously avoided splashy comments about the compromise, though party leaders in both chambers back the deal. At a GOP Senate lunch on Tuesday, members were advised that it's "probably not a good idea to shout about how great the agreement is while the White House tries to corral pissed-off Democratic votes," says a Senate Republican aide. After spending months bemoaning the swelling deficit and vowing to usher in an era of economic austerity, the party appears ready to sign off on a bill that adds hundreds of billions of dollars in fresh red ink, and that was hashed out in private with special interests lining up to shake the money tree. Citing the importance of avoiding tax hikes, FreedomWorks, a Tea Party–affiliated advocacy group, has urged its passage, though Tea Party Patriots, the movement's largest umbrella organization, balked at the deal.

While congressional observers expect the White House to lose a mix of progressives and deficit hawks, Obama appears to have a broad enough coalition to notch his first legislative victory since the midterms. The caveat, of course, is that threading anything through a sclerotic Senate and a combustible House is never easy, and even less so at this moment. "It is a lame-duck session, and the history of these events is that they can be killing fields, even when clear majorities in both houses favor something," says Larry Sabato, director of the Center for Politics at the University of Virginia, who expects the bill to pass. "They are made to order for delay and destruction."

— With reporting by Jay Newton-Small / Washington