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Attacks from right take toll on Obama's tax plan

By Charles Babington

Associated Press

Published: Wednesday, Dec. 15 2010 1:46 a.m. MST

WASHINGTON — A growing chorus of conservative criticism is prompting some House members to rethink the $850 billion package of tax cuts and extended jobless benefits that President Barack Obama negotiated with top Republicans in Congress.

The attacks are unlikely to derail the measure, which gets a final vote Wednesday in the Senate, to be followed by a debate and vote in the House. But they underscore the difficulty of building centrist coalitions after an election in which tea party conservatives ousted many Democrats and some veteran Republicans who were seen as too willing to compromise with opponents.

Conservative talk show host Rush Limbaugh, GOP presidential hopeful Mitt Romney and the Tea Party Patriots have denounced the tax plan, which previously was criticized mainly by liberals as a giveaway to the wealthy. The new reproach from conservatives is that the package would swell the federal debt while failing to make permanent the tax cuts enacted in 2001 and 2003 by then-President George W. Bush.

Congressional insiders still predict the tax plan will pass in some form before Jan. 1, when almost every American's income tax rates would go up if a new law isn't in place. But House passage this week seems a bit less certain than before, and Obama's supporters are watching anxiously to see how many opponents on the right will join those on the left.

"The longer we wait, the harder it's going to be," said Rep. Jack Kingston, a Georgia Republican who is leaning against the package. He said House leaders probably are close to assembling enough support to pass it, but many GOP lawmakers are hearing from constituents who follow commentators such as Limbaugh.

The radio talk show host says the package should cut taxes, not leave them at the Bush-era levels.

The group Tea Party Patriots also urges the tax package's defeat. The legislation was crafted in secret, the group's petition says, and it fails to kill the estate tax, a goal of many hard-right groups.

But other tea party groups, including Freedomworks, support the tax compromise. Freedomworks, headed by former House Republican Dick Armey, says conservatives should be pleased to see the Bush tax cuts extended for another two years when Democrats still control Congress and the White House.

The tax cut debate is splitting Republicans at several levels. Presidential hopeful Mitt Romney criticized the plan Tuesday in a column for USA Today.

"Given the unambiguous message that the American people sent to Washington in November," Romney wrote, "it is difficult to understand how our political leaders could have reached such a disappointing agreement." It will add nearly $1 trillion to the national debt, he said, "when we are already drowning in red ink."

Another possible presidential contender, Sen. John Thune, R-S.D., defended the tax measure in a Senate speech Tuesday. To oppose it, he said, "is to advocate for a tax increase," because a congressional impasse would allow all the Bush-era tax cuts to expire as scheduled on Jan. 1.

A new, more Republican Congress would probably restore them next year retroactive to Jan. 1, but workers might still see smaller paychecks for weeks or months because of higher withholdings reflecting the higher pre-Bush tax rates and smaller credits and deductions for children, college tuition and other expenses.

The Obama-backed plan would extend all those tax cuts, for rich and poor alike, for two years. It would trim Social Security payroll taxes and extend unemployment benefits for a year. It also would continue a number of tax breaks for business investments.

The plan restores the estate tax at a lower level — 35 percent and exempting the first $5 million — than many Democrats want. House Democratic leaders are weighing efforts to increase the rate to 45 percent and exempt only the first $3.5 million when the measure reaches their chamber.

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