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Democrats Scramble to Save Tax Bill

Updated: May 26, 11:11 p.m.

House Democratic leaders scrambled late Wednesday to whip votes for a scaled-back tax and unemployment benefits extenders bill and avoid heading home for the Memorial Day recess empty-handed.

House leaders shrank the bill’s price tag by about $50 billion Wednesday night in the Rules Committee, in a nod to fiscal conservatives’ concerns about the size of the package and the deficit. The $127 billion bill would now add $84 billion to the deficit.

But behind the scenes, House Democrats were furious at Senate leaders.

“They have been unable to tell us what the hell they could pass. They were not whipping their Members,” fumed one House leadership aide. The two chambers’ leaders agreed weeks ago that Senate leaders would determine what could pass their chamber, and then the House would pass that version. “They did not hold up their end of the bargain,” the aide said. “They had no idea what they could pass.”

Senate moderates have also been spouting off to the press about how they don’t support pieces of the bill, too, adding to the House’s frustration.

House lawmakers were also incensed that Senate Majority Whip Dick Durbin (D-Ill.) was objecting to a fix for a transportation funding formula, which would take money from his home state, instead of whipping the bill.

“When it is crystal clear that Senate Democrats do not have the votes why would House Members line up to vote for it?” the aide asked. “When you have Senators talking to the media about how they would not support the package, there is no reason for us to corral Members to vote for a package that is going nowhere.”

House Majority Leader Steny Hoyer (D-Md.) confronted Senate Majority Leader Harry Reid (D-Nev.) Wednesday to try to find a compromise that could win Senate support, and Reid suggested scaling back the “doctor fix” under Medicare, aides said. Doctors are scheduled to get a massive cut in their reimbursements next month without a fix, and extended unemployment benefits would start to expire.

Democrats were trying to find the votes for the scaled-back bill, which would limit that fix under Medicare to 19 months from three and a half years. But Democratic leaders still face a challenge getting their Members to back a bill that is expected to add nearly $100 billion to the deficit while angering parts of the business community that would see higher taxes — particularly companies that have large overseas operations or that benefit from carried interest tax rules.

And vulnerable House Democrats already feel burned that they have voted for scores of bills that are languishing in the Senate, and they don’t want to get burned again.

Reid sought to allay those concerns, but he still stopped short of saying he had the votes.

“I told him whatever they did over there, we would do our best to take care of over here,” Reid said of his meeting with Hoyer.

Senate aides said they appeared to be in better shape to get the votes for the package than the House was.

One senior Senate aide said Hoyer talked to Reid about House leaders’ own problems in securing votes.

“We’re focused on getting a bill done, but the House has got some tough decisions to make on their own,” the aide said.

Another senior Senate aide said Democrats cannot whip the bill until House leaders decide what they want to change in the bill, but Durbin said Wednesday he feels “more positive this afternoon than I did this morning” about getting the bill through both chambers before the recess.

The high-stakes negotiations also are providing the first serious test for House Ways and Means Chairman Sander Levin.

“We’re hard at work and optimistic we will move this soon,” the Michigan Democrat told reporters Wednesday after huddling with House Democratic leaders.

Levin faces a likely post-election challenge for his gavel from Rep. Richard Neal (D-Mass.), and observers are already sizing up his performance navigating the tricky politics of negotiating with his Senate counterpart while managing expectations in his own ranks.

“Levin has gotten an education this week in how tough it is to move Members when they’re unhappy,” one senior Democratic aide said. “But does it reflect poorly on Levin? I don’t think so,” the aide added, pointing to the inability of Senate Democrats to find a filibuster-proof majority as a primary stumbling block.

Others said Levin has been coming up short in hammering out a deal. “We thought it was going to come to the floor two weeks ago,” another aide familiar with the committee said. “What does that say about his management? It doesn’t bode well.”

Democrats also were trying to resolve differences with the Senate over language adjusting transportation funding formulas, but aides said they thought that issue had been resolved by adding money to prevent all states from losing funding.

The bill also would extend unemployment benefits beyond the November midterms, although not until the end of the year as originally planned. Senate Republicans were offering to back a 30-day extension but want to have it paid for by canceling stimulus money.

Reid has threatened to keep the chamber in session during the Memorial Day recess until it completes action on the extenders bill and the $60 billion war supplemental.

Tory Newmyer, Jessica Brady and Emily Pierce contributed to this report.

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