Published Thursday, Dec. 9, 2010 | 12:33 p.m.
Updated Thursday, Dec. 9, 2010 | 12:34 p.m.
The House threw down the gauntlet at President Obama’s tax compromise with Republicans today, approving a resolution that asks the speaker not to bring the framework up for a vote "in its current form."
The resolution, introduced by Peter DeFazio of Oregon, isn’t binding. But it’s a strong statement from Democrats against the deal, which Obama and Republicans have championed as necessary to create jobs and help unemployed workers.
Democratic leaders haven’t been as enthusiastic. While Senate Majority Leader Harry Reid said the bill could come to the Senate floor as early as today, Speaker Nancy Pelosi hasn’t outlined any timetable — and both are quick to point out that the framework needs to be "improved."
Large swaths of the Democratic caucus on both sides of the Hill have ripped the proposal, calling it everything from a disappointment to "almost morally corrupt." A particular point of frustration has been the estate tax.
The bill puts forward a proposal that has been favored by Republicans: 35 percent estate tax, with an exemption for the first $5 million of an individual’s estate, $10 million for a couple.
At the end of the year, absent action by Congress, the estate tax is set to rise from zero percent to 55 percent, with an exemption on the first $1 million of an estate.
That’s almost an exact reflection of a bill proposed by Nevada Rep. Shelley Berkley in the House. But many other Democrats say that’s too much.
The cost of such an increase would be $100 billion over 10 years — and while the tax package only sets out a plan for two years, it sets a precedent, Democrats point out.
They prefer a more modest change, making the estate tax rate 45 percent with an exemption on the first $3.5 million.
Berkley said Wednesday that while she prefers her version, such a change would not change her support for the overall tax bill. She was, interestingly enough, the lone vote in the caucus vote about taxes against the resolution — as in, she wants to see this tax bill get to the floor.