Obama Adviser: Shutdown Looms as GOP Bends to Will of Tea Party

Thursday: President Obama speaks at the Brent Spence Bridge regarding his American Jobs Act legislation in Cincinnati, Ohio. (AP)

WASHINGTON -- Republican leaders are putting the demands of 30 Tea Party members over 300 million Americans, a top White House adviser said Sunday, insisting that Congress pass a resolution to keep government functioning and approve President Obama's jobs plan.

Senior adviser David Plouffe, who managed the president's 2008 campaign, said the Tea Party is controlling the debate in Congress, even as it comes close to a government shutdown over how to pay for disaster relief as part of a continuing resolution to keep government operating.

"We're not going to make progress on the deficit, on things we can do right now for jobs, on tax cuts, unless those 30 or 40 Tea Party members of the Republican House stop being the focal point of our discussion," Plouffe said.

Senate Democrats on Friday defeated a House GOP-backed stopgap continuing resolution to fund the government through Nov. 18 by a vote of 59-36. The $1.04 trillion measure contained $3.7 billion for disaster aid, $200 million of which was offset by cuts to green energy programs, including a loan account that once helped fund the now-defunct, controversial solar panel firm Solyndra.

Without a continuing resolution, government is set to shut down on Friday. But the Federal Emergency Management Agency's Disaster Relief Fund is poised to run out of cash by Tuesday, if not earlier, with the account at the dangerously-low level of $175 million, according to Senate aides.

Senate Majority Leader Harry Reid has offered a substitute for the CR that strips the offsets, and a procedural vote is set for Monday night in the Senate. But the chamber's GOP leader, Mitch McConnell, predicted that bill's demise.

"Our friends on the other side don't like the idea. They'd rather just add these funds to the deficit. Why?," McConnell asked on Friday. "Because they say that's the way we've always done things around here. Well, I think there's a lesson we can draw from the debates we've been having here over the last six months, is that the American people won't accept that excuse any longer."

Sen. Lindsey Graham, R-S.C., speaking after Plouffe on Sunday, said the government is not in danger of shutdown because Americans want a deal on disaster relief, but suggested Reid take up the House proposal because it provides a plan for paying for disasters while also cutting government "in other places where the money is not so important."

"We can't borrow money every time something bad goes wrong in America. Are you able to borrow money every time something bad goes with your business or your family? You have to have priorities. That's something we don't seem to accept up here," Graham said.

But Plouffe said the debt-ceiling negotiations have already set a floor for deficit reductions, and the CR should not be controversial.

It is a "basic function of Congress to keep the government running," he said, adding that lawmakers shouldn't "play politics" by tying disaster aid to offsets that critics say will force job cuts.

"Stop playing politics, do the right thing for the country and let's make sure that we are not playing politics with disasters," he said.

Plouffe added that many items Obama proposed over the spring to put the economy back on the right track would be part of law today had House Speaker John Boehner agreed to a "grand bargain" and not folded to the will of a minority in his party that refuses to allow tax increases.

He added that several items would pass with bipartisan support in the Senate and House if the GOP leadership's "entire approach" wasn't "how do we keep those Tea Party members happy?"

"And I think the country is tired of it because we are not going to move forward together as a country unless we do so in a bipartisan way," he said.

But even as Plouffe argues that the Tea Party is creating a barrier to compromise, the president's "class warfare" approach to tax rates has many questioning the foundation of the argument.

Obama on Thursday went to Ohio to push his jobs plan, and argued that it can only pass with a drop in deficit spending if the money comes from somewhere. The president expressed his desire to close tax loopholes for oil companies and eliminate breaks for millionaires and billionaires rather than putting construction workers and teachers out of work. The administration calls it the "Buffett Rule," named after billionaire Warren Buffett, who argued that he pays less in taxes than his secretary.

"The Republicans in Congress call this class warfare. Well you know what? If asking a billionaire to pay the same tax rate as a plumber or teacher makes me a warrior for the middle class, I'll wear that charge as a badge of honor," Obama said to cheers. "Because the only class warfare I've seen is the battle that's been waged against the middle class in this country for a decade."

But according to the Tax Foundation, the top 1 percent of earners contribute 38 percent to the total tax pool and the top 10 percent pay 70 percent of the taxes. At the same time, the bottom 46 percent of income earners pay nothing at all.

"It is unfair to say that wealthy people don't pay their fair share," New York City Mayor Michael Bloomberg, an independent who is also a billionaire, told NBC's "Meet the Press." "They pay a much higher percentage of their income, they have a higher rate than people who make less. The Buffett thing is just theatrics. If Warren Buffett made his money from ordinary income rather than capital gains his tax rate would be a lot higher than his secretary. And in fact, a very small percentage of people in this country pay a big chunk of the taxes.

Plouffe argued, however, that millionaires who "make a ton of money" aren't paying their fair share.

"Twenty-two (thousand) millionaires pay less effective tax rate, under 15 percent. So, we have inequities. The American people are screaming out, saying it's unfair that the wealthiest, the largest corporations who can afford the best attorneys, the best accountants, take advantage of these special tax treatments that the lobbyist have, along with lawmakers, have cooked in the books here," said Plouffe.