US PRESIDENT Barack Obama said the tax plan he agreed with Republicans this week will pass by the end of the year, despite a mutiny by House Democrats that cast doubt on his influence over his own party.
“Here’s what I’m confident about,” Mr Obama told National Public Radio yesterday. “Nobody – Democrat or Republican – wants to see people’s paychecks smaller on January 1st because Congress didn’t act.”
The Senate majority leader Harry Reid introduced legislation on the tax plan late on Thursday. The $857 billion (€648 billion) deal will extend Bush-era tax cuts for two years, and long-term unemployment benefits for 13 months. In the hope of placating critics, Mr Reid added a $3 billion provision for tax credits for solar and wind energy projects.
Mr Reid has scheduled a procedural vote to begin debate on the tax Bill on Monday. In the House, where the Democratic caucus voted on Thursday not to considered the Bill in its current form, Mr Obama’s plan remains in limbo. “At the end of the day, people are going to conclude we don’t want two million people suddenly without unemployment insurance and not able to pay their rent, not able to pay their mortgage,” Mr Obama said. He quoted economists saying the plan could increase growth by 1 per cent and create 1.5 million jobs.
The president appealed to lawmakers to “act responsibly” and “think about those families that, in the middle of the holiday season, are trying to figure out, are they still going to have unemployment benefits at the end of the month”.
The desire of congressmen to adjourn for the holidays may be the biggest incentive to pass the legislation. “What I’m saying is, that I’m confident that we’re going to be able to get this resolved by the end of the month,” Mr Obama said, implying that Congress could be forced to convene until New Year’s Eve.
Mr Obama spoke repeatedly of reforming the tax code next year. He said the new Start arms control treaty with Russia, which Republicans will not address until the tax deal is passed, “is something that I absolutely think has to get done before Congress leaves for Christmas vacation”.
Former president Bill Clinton was to visit Mr Obama at the White House late yesterday, presumably to give him advice about the crisis over tax cuts. Like Mr Obama, Mr Clinton lost the House of Representatives to Republicans in midterm elections half way through his first term.
Also yesterday, Senators Joe Lieberman and Susan Collins introduced new legislation making the repeal of the military’s “Don’t Ask Don’t Tell” policy on gays a standalone Bill rather than part of the annual defence Bill. On Thursday afternoon Republicans, who oppose repeal, blocked discussion of the defence Bill.
The top US military brass support the repeal, but the Senate may not have time to discuss it before the holiday recess. The Senate must vote on a trillion dollar Bill to enable the government to continue to function next week. The Start treaty would also take precedence over “Don’t Ask Don’t Tell”. The repeal is one of many campaign promises that Mr Obama may not be able to keep.