On Wednesday evening, the state of play on the tax cut deal remains very similar to where it was all day. A deal is likely to pass, but changes to the deal are also likely.
In the Senate, which will be the first chamber to vote on the tax cut deal, the leadership of both parties has said a vote could take place as early as tomorrow. However, given the crowded Senate schedule and ongoing negotiations, it is more likely that the vote won’t take place for a few more days.
Here are the items on the table during the negotiations:
1. Debt ceiling
It looks unlikely that the debt ceiling will be raised as part of the deal:
Mr. Reid said Senate Democrats had discussed whether to seek to add an increase to the country's borrowing limit to the tax package, but they had been unable to reach a consensus opinion.
He said he would prefer to deal with the debt ceiling issue next year, when he said Republicans—who gain control of the House in January—"will have some buy-in on the debt."
This is a bad, bad move from Reid that is hard to figure out. As I discussed earlier today, if raising the debt ceiling is not part of the deal, then Republicans have another opportunity to take some hostages early next year. This puts any conceivable positive aspects of the deal at risk of being negated--or worse--in just two or three months. Even supporters of the deal, such as Ezra Klein, are sounding the alarm on this one.
2. Estate tax
The House Democratic leadership has come out in opposition to the deal unless there are changes to the provisions on the estate tax. However, as Joan blogged a couple hours ago, Senate Republicans, led by Lindsay Graham, have called the estate tax provisions non-negotiable.
Don’t expect the version of the tax cut deal to pass the Senate with any changes to the estate tax provision. However, expect the House to pass a deal with changes to the estate tax provisions. Then, expect this to be one of the final sticking points in the last negotiations before there is a deal that is signed into law.
In short, this aspect of the negotiations won’t get much play in the next day or two, but expect it to come up again soon.
3. Build America bonds
A third item involved in negotiations are Build America bonds. The Wall Street Journal explains:
Separately, a group of nine Democratic senators launched a bid to add an extension of Build America infrastructure bonds to the tax-cut package.
The bond program is set to expire Dec. 31. More than $150 billion of the bonds have been issued to help finance such projects as upgrades to Alaskan airports and to school, water, sewer and electric facilities across the country.
"Build America Bonds have proven to be an efficient way to create jobs and build lasting infrastructure across the country," the senators wrote in a letter to Senate leaders, dated Tuesday.
The deal on tax-cut extensions struck between the White House and Senate Republicans didn't include an extension of the bond program, one of Mr. Obama's signature economic-development programs.
The letter was signed by Sens. Ron Wyden of Oregon, Robert Menendez and Frank Lautenberg of New Jersey, Debbie Stabenow of Michigan, Mark Begich of Alaska, John Kerry of Massachusetts, Barbara Boxer and Dianne Feinstein of California, and Maria Cantwell of Washington.
4. Energy incentives
Maria Cantwell (D-WA) is leading a group of Senators who are seeking to attach tax extenders for renewable energy projects to the deal:
A pot of sweeteners in the form of tax extenders for pet energy industries could help ease the bitter pill that Democrats may have to swallow if they agree to the tax deal President Barack Obama and Republicans carved out.
The expiring tax incentives designed to boost ethanol and other energy industries might be enough to attract Democratic votes to extend the Bush-era tax cuts for two years.(...)
Along with the possible decrease in the ethanol credit, the White House also specifically cut out of their deal with Republicans $1.4 billion in federal grants that would boost wind, solar, geothermal and biomass projects.
Ah, ethanol subsidies. Are there any pieces of legislation they can’t be attached to?
5. New Dem demands
In the House, the New Democrats are also making some demands, but it’s unclear if they are distinct from those already listed here.
New Democrats, the pro-business wing led by New York Rep. Joe Crowley, signaled openness to the bill, but only if bonus depreciation and research and development tax credits are included in the final product.
Wish I had more details here, but I don’t.
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Finally tonight, check out Ezra Kelin’s interview with Rep. Peter Welch, who is leading the Democratic opposition to the deal in the House:
One of the things I give Nancy Pelosi a lot of credit for is that she’s able to get things passed and hold her members together because she shows us that she’s doing everything possible to get our views into these bills. I was a single-payer person, and I was disappointed in the health-care bill. But I supported the public option, and I watched as Nancy Pelosi fought and fought and fought to get the public option into the bill. But then it came back from the Senate without it. And I knew Pelosi had done every single thing she could possible do to get it in there. So I knew it was really the best we could get, and I had to decide whether to vote for it or not. And I think the president had the opportunity to do something similar here(...)
The president had a chance to engage America. He had the bully pulpit. And in politics, it’s important to engage in fights where you really show the American people the differences. What could’ve been a better opportunity than this? The polls back him up, the House votes for his bill, the Senate votes for this bill and gets stopped by the filibuster, and the president could’ve pushed the Republicans into the glare of the light to defend their position by taking vote after vote after vote. But we didn’t do it.
My reading of Welch is that he does not think its time to stop fighting this battle yet. On that front, I completely agree. If you haven’t already, please sign our petition thanking Representative Welch and Senator Bernie Sanders for leading the opposition to the tax cut deal in Congress. We are over 25,000 signatures, and I will be delivering the petition tomorrow.