The Note: Taxing Weekend Ahead


SATURDAY SESSION. Senate Majority Leader Harry Reid is planning to hold two tax cut votes on Saturday after a bipartisan deal collapsed last night on Capitol Hill. ABC’s Matthew Jaffe reports that the two weekend votes will be on the House-passed bill to extend the tax cuts for middle-class Americans earning under $250,000 a year and another to raise the threshold to $1 million a year. “We think we can show the American people what the Democratic priorities are and we are free to talk about what the Republican priorities are because they showed us today,” Reid told reporters last night as he emerged from a series of closed-door meetings on the Hill. Meanwhile, the House passed a middle class tax cut bill yesterday by a vote of 234 to 188. Along with 231 Democrats, three Republicans voted in favor of it, while another 168 Republicans and 20 Democrats were opposed.

BEHIND THE VOTE. Given the easy passage of the middle class tax cut package, many were left wondering why Democrats didn’t take this vote before the election. By doing so, the thinking goes, they would have been able to go into the final days of the election with a positive, action-oriented message (“we just cut your taxes”) as and put GOP on the defensive for not supporting the middle class. However, there was concern from vulnerable moderate Democrats that this would put them in an even more precarious position. Instead of being able to boast about a vote for tax cuts, these Democrats feared that it would allow Republicans to paint them as “Pelosi-clones” who wanted to raise taxes on small businesses and other hard-working Americans. In a letter to Speaker Pelosi and Majority Leader Hoyer in September, 31 Democrats urged a temporary extension of all the tax cuts. Many members of the House also feared that their members would be hung out to dry once this legislation got to the Senate. If the Senate ended up passing a temporary extension -- which most agree is the only hope of getting to 60 votes -- lots of Democrats would be forced to choose between either voting for a bill that extended tax cuts to the wealthy or voting against a bill that included tax cuts to the middle class.

WORD FROM THE WHITE HOUSE. After yesterday’s House vote, White House Press Secretary Robert Gibbs weighed in: “The President continues to believe that extending middle class tax cuts is the most important thing we can do for our economy right now and he applauds the House for passing a permanent extension. But, because Republicans have made it clear that they won’t pass a middle class extension without also extending tax cuts for the wealthy, the President has asked Director Lew and Secretary Geithner to work with Congress to find a way forward. The talks are ongoing and productive, but any reports that we are near a deal in the tax cuts negotiations are inaccurate and premature.”

But the progressive community is furious at Obama for that kind of rhetoric -- they see it as a sign that the president is simply caving to GOP demands. One group, the Progressive Change Campaign Committee, lashed out in a statement: “At a moment when they could have celebrated victory, this White House incredibly chose to wave the white flag -- signaling to Republicans that they will take any deal, no matter how bad, including borrowing billions to extend tax cuts for the richest Americans. This is a direct betrayal of a core Obama campaign promise, and the essence of political malpractice and negotiating incompetence.” As ABC’s Jake Tapper reported yesterday, the PCCC announced it would run a TV ad urging President Obama not to “cave” on his promise to let the Bush tax cuts for the wealthiest Americans expire. The ad will run on cable in Washington DC and in Des Moines and Cedar Rapids, Iowa. The PCCC said yesterday it would be increasing the ad buy in Iowa “telling Obama to keep his promise and fight the Republicans on this issue.”

BOTTOM LINE: For all the hand wringing by liberals about White House “capitulation” to Republicans, the biggest problem for the Obama administration is now -- and has always been -- getting enough Senate Democrats on board.

Watch Jonathan Karl’s “Good Morning America” report on the continuing showdown over taxes:

ON THE AGENDA: Most likely there will be more floor debate in Senate on taxes ahead of tomorrow's votes and another meeting of White House and Congressional tax negotiators today. And what are the dynamics behind those negotiations? The New York Times’ David M. Herszenhorn and Jackie Calmes have the details: “The Obama administration is holding out for an extension of unemployment assistance and of a variety of expiring tax breaks for low-wage and middle-income workers as part of a deal with Congressional Republicans to extend all the Bush-era tax cuts. … It is possible that the parties will be unable to reach a compromise, in which case tax rates will revert at the end of this year to their pre-2001 levels, meaning an across the board tax increase. However, the Treasury could be directed to keep the current rates while negotiations continue. But the sense within both parties was that Democrats were essentially negotiating the terms of their major retreat on an issue that they once considered a slam-dunk on both substantive and political levels.”

NOTED: Though the impasse over taxes remains, ABC’s Jaffe reports, Thursday night the Senate did complete one urgent matter: they cleared the House-passed resolution to keep the government running until Dec. 18. If lawmakers had not acted, the government would have shutdown today, but now that possibility has been averted.

JOBS: LOWERING EXPECTATIONS: The latest employment numbers are out today, and they’re not nearly as positive as expected. The nation’s employers increased their payrolls by 39,000 during November, significantly worse than the 130,000 or more economists were expecting. The nation’s unemployment rate jumped from 9.6 percent to 9.8 percent. With today’s jobs data, there has been a net loss of 7.5 million jobs since December 2007.

ON TODAY’S “TOP LINE”: ABC’s Amy Walter and Rick Klein speak with Sen. Kent Conrad, D-N.D., the chairman of the Senate Budget Committee. Conrad will weigh in on the ongoing negotiations over tax cuts and the debt commission plan, among other things. Also on the program today: Major Garrett from The National Journal. Watch “Top Line” LIVE at 12:00 p.m. Eastern.


PALIN CHRONICLES. Sarah Palin visited Iowa for the second time in less than a week on Thursday, continuing her nine-state, 16-stop book tour, ABC’s Mary Bruce reports: “As with Palin's other stops along the tour, the press at her book signing in Spirit Lake, Iowa were not allowed to ask questions of Palin as she signed hundreds of copies of ‘America by Heart: Reflections on Family, Faith and Flag.’ Iowa reporters seem to have grown frustrated with the limited access to a potential presidential candidate in waiting. ‘If Palin runs in Iowa, she can't just flirt,’ Des Moines Register political columnist Kathie Obradovitch wrote after Palin's first visit last Saturday. … New Hampshire, the first state in the nation to hold a presidential primary, is notably absent from Palin's book tour, a move which has left the New Hampshire's Republican leaders a bit taken aback.”

HILLARY’S PLANS. ABC’s Kirit Radia notes that in a town-hall style meeting in Bahrain today Secretary of State Hillary Clinton reiterated that she has no interest in running for president again. She has been mentioned as a possible replacement for Defense Secretary Robert Gates but she appeared to rule that out as well, saying this would likely be her last public office. Instead she said that she would like to work on behalf of women and girls. “I think I'll serve as secretary of state as my last public position, and then probably go back to advocacy work, particularly on behalf of women and children, and particularly around the world.”

VICKI FOR SENATE? A 1,700-member Facebook group called "Vicki Kennedy for Senator of Massachusetts in 2012” is trying to recruit the widow of the late Sen. Edward M. Kennedy to run against Republican Scott Brown, the AP’s Glen Johnson reports. The interest is shared by some Democrats looking for a heavy-hitting challenger to Brown, who staged an extraordinary upset in January to claim the seat Edward Kennedy had held for nearly a half-century. Recent polls have shown Brown, a heretofore little-known state senator, is now the most popular politician in Massachusetts. … ‘I think possibly so many people are begging her to run against Scott Brown, unless she rules it out in some Shermanesque way, she is going to keep the interest alive,’ said Marc Landy, a Boston College political science professor.”

RON PAUL RETURNS. “It may have taken 34 years,” Bloomberg-Business Week reporters Phil Mattingly and Robert Schmidt note, “but Ron Paul has arrived, and he doesn't plan to squander the moment.” Paul, a long-time critic of the Fed has a plan. From the report: “His agenda includes landing the chairmanship of the House Financial Services Committee panel that oversees monetary policy—a job that will give him the power to push legislation reining in the central bank and to haul Fed governors up to Capitol Hill for hearings. The prospect has Wall Street, Fed officials, and even Republican House leaders worried that Paul's agenda could roil the markets and make a mockery of the U.S. financial system.”


@ markknoller : CBS Poll shows Pres. Obama with 48% approval rating. 42% disapprove, slight improvement from last month's poll 45% approval.

@ anamariecox : Day two of the #DADT hearings with the military leaders said to be less-than-psyched. This is where GOP hopes for keeping DADT live or die.

@ HotlineJosh : Must-read @ majoratNJ piece in today's @ NationalJournal mag about McCain's "strange isolation" on don't ask, don't tell

@ lizzieohreally : 15.1 million Americans unemployed. 6.3 million for 6 months or longer.

@ SarahPalinUSA: Happy Hanukkah! Rebelling against oppressors, enduring great threats=Jewish community encourages perseverance &belief in miracles;we honor u

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