House Democrats Reject Obama Tax Plan

VIDEO: The president?s party thinks the tax plan favors the wealthy too much.
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House Democrats voted Thursday to reject a controversial tax deal brokered between President Obama and the incoming Republican leadership, highlighting the growing rift inside the president's own party.

By voice vote, House Democrats overwhelmingly passed a resolution Thursday that said the tax package should not come to the floor of the House for consideration.

"When faced with take it or leave it, we'll leave it," said Rep. Lloyd Doggett, D- Texas, after leaving the heated closed-door meeting of the caucus.

The proposed package would extend the Bush tax cuts across incomes, extend benefits to the unemployed, and cut payroll taxes.

House Speaker Nancy Pelosi said the tax cuts for the wealthy were the main focus of debate, "then to add insult to injury, they added the estate tax, which is a bridge too far for many of our members."

"We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote."

Rep. Peter DeFazio, D-Ore., said the vote to reject the deal "was nearly unanimous."

Democrats, he said, had a "large number of objections and concerns" with the proposed plan.

The surprise insurrection against the president seems motivated mostly by anger at extending cuts to the wealthiest Americans and a provision that would lower taxes on inherited income -- the estate tax.

"The caucus has no clue as to how that got included," Rep. Charles Rangel, D-N.Y., told ABC News, referring to the estate tax provision in the deal.

Some Democrats also argue that the plan would add $700 billion to the national debt.

Those additions were a bridge too far for Democrats, who said they would only consider the proposal if it was changed.

As of this morning there were just over 50 House Democrats who said they would vote down the proposal if it came to the floor, but most observers expected it would come to a vote.

DeFazio, however, said 99 percent of the caucus opposed bringing the current plan to a vote.

Republicans and the White House were quick to condemn the Democrats' rejection of the proposed plan.

"President Obama has said that failing to stop all of the job-killing tax hikes scheduled for January 1 will have serious consequences for our economy. House Republicans agree," said Michael Steel, spokesman for Speaker-designate John Boehner, R-Ohio.

The White House said it was confident that both chambers of Congress would pass a package with much of the original deal in place.

"The House and Senate are working through the normal process of bringing a bill forward and we are confident that the major components of the tax framework that we fought for will remain in the final package brought to the floor and ultimately passed by Congress," said White House spokeswoman Jen Psaki.

The Senate still plans to introduce tax plan for a vote today.

"We hope that we can very quickly lay down the tax bill," Sen. Majority Leader Harry Reid, D-Nev., said on the Senate floor, moments after the House resolution passed.

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