Veto threat derails tax deal

By Bernie Becker - 11-25-14 14:46 PM EST

 

The White House on Tuesday threatened to veto an emerging deal that would restore several lapsed tax breaks, bringing into the open tensions between President Obama and the top Senate Democrat.

Jennifer Friedman, a White House spokeswoman, said the deal being hashed out between Senate Majority Leader Harry Reid (D-Nev.) and House Ways and Means Chairman Dave Camp (R-Mich.) gave far too much to business interests, and far too little to the middle-class. 

“The president would veto the proposed deal because it would provide permanent tax breaks to help well-connected corporations while neglecting working families,” Friedman said, just hours after reports emerged that a $450 billion deal on the tax breaks was close at hand and that negotiators hoped to wrap it up by Tuesday.

The White House veto threat upended those talks, underscoring that both Obama and House Democrats had some problems with the agreement that Reid was negotiating. 

Top administration officials, like Treasury Secretary Jack Lew and White House spokesman Josh Earnest, had warned lawmakers on Monday that they wouldn’t approve of the deal being negotiated on Capitol Hill.

The deal would have extended top priorities for the business community, like faster write-offs for expenses and an expanded version of the popular credit for research, but would have left untouched tax breaks for low-income families championed by Democrats.

Aides on Capitol Hill said Tuesday evening that the deal was off, and that only time would tell if it could be revived.

Obama’s efforts to submarine the package of tax breaks, commonly known as extenders, also comes after the White House and Reid’s aides have sniped at each other in the press following the GOP takeover in the Senate. 

Democratic aides on Capitol Hill said that the White House quickly made it clear Tuesday that it was, in the words of one staffer, “livid” over a deal that would have indefinitely extended tax priorities for both parties. 

Senior administration officials reached out to Democratic lawmakers to get that message across, aides added, with even Obama and Lew trying to marshal opposition.

“This is a terrible deal for Democrats,” one aide said.

Later, prominent Democrats like Rep. Chris Van Hollen (Md.), Rep. Sandy Levin (Mich.) and Sen. Sherrod Brown (Ohio) threw their support behind the White House’s veto threat.