House Dems reject Obama's tax plan

By Matt Viser, Globe Staff

WASHINGTON – The House Democratic caucus this morning voted to reject President Obama’s tax compromise, a stinging rebuke of the president that throws into question whether his plan will pass.

By a voice vote, Democrats passed a resolution saying that House Speaker Nancy Pelosi should not bring the negotiated package to the House floor, unless changes are made. The vote is nonbinding, but it demonstrates the growing rancor among House Democrats, and their desire to see key changes made to the package before they will vote on it.

“This is what’s called negotiations, and this is what many of us have been concerned about,” Representative Michael Capuano, a Somerville Democrat, said in an interview. “No one is trying to hurt or embarrass anybody. We’re just saying that we were independently elected and we have our own principles, and we don’t think many of those principles were met – or that a strong attempt was made at those principles.”

“It doesn’t assure victory,” he added, of the caucus vote. “But if I’m going down, I want to go down fighting. At least now I feel like I’d be going down fighting.”

The caucus did not vote on which changes should be made, but Democrats have been requesting several items, such as adding several billion dollars to extend renewable energy tax credits. Democrats have also opposed the proposed provision on the estate tax, contending that a rate of 35 percent is too low and the thresholds of protected assets — $5 million for individuals and $10 million for couples — are too high.

Several senators have also requested that credits for the ethanol industry be extended as part of the package.

The White House predicted that the package would ultimately pass.

“At the end of the day, this will get done,” White House press secretary Robert Gibbs said. He also said that there are elements of the plan that both parties don’t like – but will have to accept.

“If everybody took out what they didn’t like we would have nothing,” Gibbs said.

Representative Edward J. Markey, a Malden Democrat and dean of the delegation, also voted today to reject the proposal.

“I have serious concerns about any package that continues tax breaks for millionaires and billionaires when they don't need them and we can't afford them,” he said in a statement. “I am also concerned that expiring tax credits for clean energy technologies are not being renewed, which could jeopardize tens of thousands of jobs in wind, solar and geothermal production.”

Markey also said he wanted to provide seniors with a one-time $250 Social Security payment.

“In its current form, I cannot support the proposal worked out with the Senate Republicans,” he said.

Representative Peter Welch, a Democrat from Vermont, has been circulating a letter saying that the plan is unwise. That letter has been signed by 53 House Democrats, including Representative Barney Frank, of Newton, and Representative Stephen Lynch, of South Boston.

If all 179 House Republicans vote in favor, they would still need 39 Democrats to vote in favor of the bill. That support would probably come from conservative Democrats who have not been as opposed to the package, but if Pelosi doesn’t even bring it to the floor for a vote, it would effectively kill the current plan.

The Senate, meanwhile, appeared to be moving toward debate on the issue. Senate Majority Leader Harry Reid may bring the issue to the floor as early as today, which would set up votes on the matter for Saturday.

Matt Viser can be reached at maviser@globe.com.