The Note: Damage Control

Dec 8, 2010 9:22am


CONTAINING THE REVOLT. The White House sales job on the tax cut deal negotiated between the administration and Congressional leaders continues today, but rather than placating angry Democrats, one of the president’s senior advisers appears to be digging in his heels. In an interview on ABC's “Good Morning America” today with George Stephanopoulos, presidential adviser David Axelrod indicated there was little wiggle room on the compromise that has been struck, saying that “the framework of the deal is in place.” He added: “Obviously compromise means compromise. That means each side accepts things they don’t want. Republicans essentially traded away everything in the package for tax cuts for the wealthy temporarily and this more generous treatment of estates. We don’t like it, but what we got in exchange was significant tax relief for the middle class, an extension of unemployment insurance for people who have lost their jobs in this down economy.” The White House is likely to once again deploy Vice President Joe Biden to lean on Congressional Democrats to accept the plan.

And, as ABC’s Jake Tapper notes, President Obama taped a video message to supporters last night in which he argued that the tax cut proposal is an example of “changing our politics, of doing the hard work of finding the common ground.” Obama said: “It’s not perfect but this compromise is an essential step on the road to recovery … I know some folks — even good friends — are unhappy with the plan because, as with any negotiation, getting there required some give and take.” More from Tapper’s report: “House Democrats meeting Tuesday night were angry and frustrated about the deal, Democratic sources told ABC News, with many expressing concern not only about the continuation of the lower tax rate for higher income levels, but a two-year 35-percent rate for the inheritance, or estate, tax, with a floor of $5 million. House Speaker Nancy Pelosi, D-Calif., told reporters that there was ‘unease’ in her caucus. Said Rep. John Larson, D-Conn., ‘At the core was deep and abiding concern by a number of members who stood up and said that this was not a good deal.’ Added Rep. Jim Himes, D-Conn., ‘I think it would be wise for our negotiators to go back and revisit the estate tax issue.’”

REVIEWING THE PRESSER. Though the president turned feisty near the end of his hastily-arranged press conference on Tuesday, saving some of his strongest points for last, Obama’s main argument — that this compromise is good for regular Americans and good for the economy — seemed to get lost in his desire to win the “process” argument. The whole point of the bully pulpit is that it allows the President to rise above the petty Washington debate and appeal directly to the public. He largely missed out on that opportunity yesterday. If the President wants to win this fight, he needs to move off process and move onto progress. He might consider replacing talk of “collateral damage,” “hostage takers,” and “public option” with references to jobs, fixing the economy, helping Americans get back on their feet. The more he drives this point home, the more pressure it puts on both sides to stop their sniping and work out their differences. Or, as David Axelrod, put it in his appearance on “Good Morning America” today: “There is plenty of time for politics later, but right now let’s get the job done for the American people.”

WHAT THE TAX CUTS MEAN TO YOU. ABC’s Huma Khan and Jake Taper provide a primer on the tax cut proposal: “Extending all of the tax cuts would increase after-tax income for households at all income levels but gains would be greatest for those at the top of the income distribution, according to the non-partisan Tax Policy Center. Those in the top 1 percent of the income group would see a 5.8 percent change in their after-tax income versus just 0.6 percent for the lowest income tax bracket. An average U.S. household, with an income of $49,777, would get to keep the tax cut of $2,124 and get an additional $996 from the lower payroll tax that was negotiated in the deal, plus a $1,000 tax credit per child and a partially refundable tax credit of up to $2,500 for college tuition. It also means that the family of the average Wall Street banker, paid more than $311,000 last year, will keep the $9,318 in tax savings, as opposed to the $8,012 the president wanted them to keep.”

NOTED: The New York Times also crunched the tax numbers and found that while the compromise proposal would help almost everybody, some low income Americans would actually see their taxes go up. “The only groups likely to face a tax increase are those near the bottom of the income scale — individuals who make less than $20,000 and families with earnings below $40,000,” The Times’ David Kocieniewski reports. “The proposal does not include an extension of Mr. Obama’s signature tax cut, the Making Work Pay credit, which provided a credit of up to $400 for individuals and $800 for families of low and moderate income. Instead, the plan creates a one-year reduction in Social Security payroll taxes, which are generally levied on the first $106,800 of income.”

STATE OF PLAY. ABC’s Matthew Jaffe previews the action in the Senate today: “All of the complaints that we’ve heard from Senate Democrats about the tax cut compromise may turn out to be a lot of bark, but no bite. Only Sen. Bernie Sanders has vowed to filibuster it. Some such as Sen. Mark Udall, D-Colo., and Sen. Tom Harkin, D-Iowa, have said they are leaning towards opposing it, while others like Sen. Mary Landrieu, D-La., have blasted the deal, but not committed to opposing it. At this point, with Senate Democrats today set to hold their second caucus meeting in two days, it appears that the deal will likely pass the Senate sometime in the next week.” Meanwhile, House Democrats will caucus again this afternoon, and Vice President Biden will also to speak to the group, ABC’s John R. Parkinson reports.

REMEMBERING ELIZABETH EDWARDS. A funeral for Elizabeth Edwards, who died yesterday at the age of 61 after a long battle with breast cancer, will likely be held later this week. "Today we have lost the comfort of Elizabeth's presence but she remains the heart of this family,” her family wrote in a statement yesterday.  "We love her and will never know anyone more inspiring or full of life.” More details from ABC’s Emily Friedman and Leezel Tanglao: “Edwards passed away at 10:15 a.m. this morning as a result of liver failure, but the family did not release the news until late in the day because her children were at school, a close friend of the family told ABC News. Edwards, who was estranged from her husband and one-time presidential hopeful John Edwards, was first diagnosed with breast cancer in 2004. The cancer returned in 2007, and earlier this week it was announced the she had stopped all cancer treatment. he family friend said that even Edwards was surprised at how fast her illness progressed in her final days. Doctors had told her just last week that she could have as many as eight weeks to live.”


ON TODAY’S “TOP LINE”: ABC’s Amy Walter and Rick Klein talk to Rep. Raul Grijalva, D-Arizona, a leader of the Congressional Progressive Caucus, about the tax cut deal. Yesterday, Grijalva and the co-chariman of the caucus, Rep. Keith Ellison, D-Minn., expressed their opposition to the compromise plan. “We call on our Congressional leaders in the House and Senate to hold firm on passing a middle class tax cut with no strings attached,’’ they said in a statement, adding, “Tax breaks for billionaires don’t create jobs.”

Also on the program, David Drucker reporter for Roll Call, who writes today about the presidential ambitions of Sen. John Thune, R-S.D. From Drucker’s piece: “Sen. John Thune has quietly begun seeking the counsel of his closest Senate colleagues and an array of party operatives as he considers a bid for the White House in 2012. ‘I’m having a lot of discussions with people whose opinions I value. You try and have as many data points as you can to make a decision like that,’ the South Dakota Republican said in a brief interview with Roll Call on Tuesday. ‘I continue to visit with potential contributors and to visit with people both in my state and around the country.’ Watch “Top Line” LIVE at 12:00 p.m. Eastern.



REID’S LINE ITEM. Politico’s Ken Vogel and Manu Raju report that “Senate Majority Leader Harry Reid is trying to use the tax cut package President Barack Obama brokered with Republicans to legalize online poker.” More from their scoop: “Already, the online poker proposal has exposed the Nevada Democrat to charges of flip-flopping on a controversial issue, as well as using his Senate leadership position to repay big casino interests that helped him win reelection in a hard-fought campaign against Republican Sharron Angle last month. … Sen. Orrin Hatch (R-Utah), as well as several senior congressional sources and gambling lobbyists, confirmed that Reid and his staff have reached out to other Senate offices to try to build support for adding the online poker legislation — a draft of which POLITICO has obtained — to a measure extending the Bush-era tax cuts.”

CINO: IN THE MONEY. Former Bush administration official and long-time Republican operative Maria Cino took another step toward a run for RNC chair last night with a fundraiser hosted by GOP strategist Mary Matalin. According to one of the attendees, almost 400 people showed up — almost twice the number expected and she “shattered her fundraising goals.” The source said that “Maria made a few remarks noting the unfortunate problems the party has encountered due to the poor management of the past couple years but talking about ways the RNC can rebound to be ready for 2012.” Others at the fundraiser included Ed Gillespie, Former Rep. Bill Paxon and Kathleen Shanahan, former chief of staff to Jeb Bush.

THE UNDECIDEDS. The Minneapolis Star Tribune reports this morning that Tom Emmer, the GOP candidate for governor in Minnesota, will concede the race today at his home in Delano. Democrat Mark Dayton maintained his nearly 9,000 vote lead in the statewide recount conducted over the last week. And most recently the state Supreme Court dismissed a key Emmer argument that local election officials had used an improper method on election night to reconcile votes cast with registered voters. Per the Star-Trib: "The planned concession clears the way for Dayton, a former U.S. senator, to become the first Democratic governor in Minnesota in two decades."



@rickklein: DeMint to join Sen. Sanders' filibuster of tax deal. now things get interesting.

@Jordanfabian: Sen. Mark Pryor (D-Ark.) says he wants 'Don't ask, don't tell' repealed. Doesn't face reelection until 2014 …

@HotlineJosh: Altschuler concedes to Rep. Bishop in #NY01 – leaves GOP gains at 63 for the cycle.

@marcambinder: Tick-tock of the tax deal w/ Joe Biden and Ron Klain playing key roles

@amieparnes: Ive been to a couple of WH xmas parties now in both Bush & Obama admins and I have to say, they're always magical & live up to expectations



KEN SPAIN’S NEXT MOVE. National Republican Congressional Committee Communications Director Ken Spain, will be joining the Private Equity Growth Capital Council as Vice President of Public Affairs and Communications. “We are thrilled to attract someone of Ken Spain’s experience, talent, and accomplishment to the PEGCC,” Douglas Lowenstein, PEGCC’s President and CEO, said in a statement today.  “Our top priority in the next 12-24 months is to tell the private equity success story state by state and district by district and Ken brings the proven communications and campaign management skills to help us accomplish that goal.”  The PEGCC is a Washington, DC-based advocacy, communications and research organization that helps analyze and distribute information about the private equity and growth capital investment industry.


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