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How Far Will House Dems Take Tax Fight?
"We're not going to hold this thing up at the end of the day."
It's gut-check time for House Democrats.
The Senate today will likely advance the tax deal struck between President Obama and Republicans, and do so by a large margin.
Liberal Democrats who had been complaining in the abstract will be soon confronted with a concrete piece of legislation. When asked last week whether her caucus would support the tax bill, House Speaker Nancy Pelosi shot back "What Bill?" Well, here you go, madam speaker.House Democrats are expected to insist on a modification to the estate-tax part of the deal. The Obama-GOP plan is for a 35 percent tax on estates of more than $5 million. House Democrats are looking at a graduated system that would levy larger taxes on bigger estates - perhaps 55 percent for estates over $10 million - and a lower cap for the initial rate - perhaps $3.5 million instead of $5 million.
It is a budgetary flyspeck, since the estate tax generates relatively little money for the government ($29 billion from fewer than 20,000 estates in 2008), and the changes being considered would mean a difference of perhaps only a few billion dollars. The very rich already know how to avoid much of the tax through foundations, trusts and incorporations.
The goal of the cap is to protect small businesses and family farms in which valuable assets, like land and equipment, cannot be sold to pay tax bills after grandpa dies without destroying the enterprise.
Senate Republicans feel very protective of their $5 million cap, but also believe it is up to President Obama to enforce discipline in his party on the deal as written.
House members have been pointing to a series of "extenders" that appear in the Senate plan which continue various tax breaks and subsidies for windmills, ethanol, rum exports, Samoan development and more. They argue that if Senators got to lard up the bill, then the deal has already been changed.
But, Senate Republicans are pushing back hard on the premise and saying that the baubles were part of the deal negotiated with Team Obama.
"This was all part of the package from Day One," a senior GOP aide told Power Play. "There are no changes to the original deal. Anything else is just House Democrats' spinning."
If House Democrats try to change the estate tax provision, it may be enough to drive away a flock of GOPers in the Senate and House.
"We'll walk. Absolutely," an aide to a key conservative Senate Republican told Power Play.
Talking to Chris Wallace on "FOX News Sunday," Pelosi lieutenant Rep. Chris Van Hollen (D-MD) seemed to signal that for all the rage in his caucus, the bill was on track for passage. Van Hollen later walked back his remarks about not "holding up" the deal in conversations with the New York Times and other outlets, but for the dozens of House Democrats irate over the proposal, it likely sounded like a precursor to surrender.
Remember, Pelosi was able to retain her position as top House Democrat despite the party suffering historic losses because she promised the controlling liberal wing of the caucus that she would fight hard for their agenda and not let them get rolled the way they were in the Clinton years.
Make no mistake - the 90+ members of the House Progressive Caucus are serious about scuttling the deal and triggering an across-the-board tax hike if they don't get some concessions. In order to show good faith with her team, Pelosi has to gain at least some changes to the plan.
We'll see how big the Senate majority for the is when the test vote comes this afternoon, but it likely won't be big enough to survive a defection of a large bloc of conservatives.
It's going to be Senate conservatives versus House liberals and unless Pelosi is willing to hand a humiliating defeat to her president and risk what shreds of recovery are underway, the Senate conservatives have the upper hand. Republicans, after all, will be able to write whatever tax bill they like after Jan. 1.
One emerging scenario is that the House will make its own changes, pass the bill, but then knuckle under in 11th hour negations with the Senate. It's political theater, perhaps, but just the kind that keeps Pelosi at the head of her caucus.
Health Care Hangs Over Obama-Business Summit
"The tax compromise and the Korea deal made a big difference-there's a lot of respect, and the view that this could open the door to further compromises by the president and Congress."
-- Johanna Schneider, executive director of the Business Roundtable, previewing for the Wall Street Journal a Wednesday summit between President Obama and top CEOs.
President Obama will meet Wednesday with top CEOs at Blair House for a luncheon summit on trade and taxes.
The partial list of attendees leaked in advance of today's announcement includes Google, Cisco, IBM, AmEx, Dow and Pepsi.
It was once contemplated that Obama would actually try to patch things up with the U.S. Chamber of Commerce, but the long war between the president and that group still seems to be raging. An L.A. Times report even suggests that Team Obama is trying to cajole Chamber members into quitting the group.
Obama will instead create his own business group, including Democrats' preferred corporate patron, Google.
This is something of a replay of the early Obama presidency, when he sought out the counsel of favored companies and shunned others. This time, though, the president has more to offer his friends from the private sector. His push for more trade and pursuit of a tax overhaul that would include a reduction in corporate tax rates have Democrats in the business world singing hosannas to the new pro-business Obama.
But, at the Richmond federal courthouse today, the next round of Obama's boxing match with business will get underway as a judge rules on a lawsuit challenging the president's national health insurance law.
If the judge rules, as expected, for Virginia Attorney Ken Cuccinelli that the commonwealth has the right to block the portion of the president's law that would force Virginia residents to purchase health insurance or enroll in a government program, the White House will have to strike back hard.
And even if the Virginia judge sides with the president, a Florida court is set to rule on a similar suit brought by a raft of states and small business owners.
So far, the administration has been able to mollify many in the business world with the generous granting of waivers from key provisions of the law.
Plus, since most of the key provisions don't hit for at least two more years, the plan has not interfered too much with the pro-business re-branding effort at the White House.
But, if states succeed in blocking the mandate in Obama's law, the plan would collapse. If insurance companies do not get millions of mandatory customers, the cost of insuring the new clients mandated by the president's rules would cause the already groaning insurance structure to crumble.
Another area of concern for the White House is a plan that's gaining some bipartisan traction in the Senate to allow states to opt-out of the mandatory insurance provisions. Rather than shattering the new law, this would neuter it in advance of implementation. If only deep blue, budget-busted states like California and Massachusetts stay in the fold, the insurance law would simply become another unfunded liability.
Simply put, the administration cannot afford any reversals on health care, and will have to devote significant time and political capital to its defense in the coming two years. With House liberals more zealous in defeat, he will find fewer partners for compromises that might save the plan.
In this lame-duck period Obama is having some success with getting business back on board, but the coming battles on health care may soon overshadow his bust of private-sector bonhomie.
Steele Plays His Cards
"Behind the scenes, there's been a great deal of shuttle diplomacy over the last several weeks to provide Steele with an exit strategy, but as of late [Saturday] he's opting for another run."
-- GOP insider to Power Play on the negotiations between Republican National Committee Chairman Michael Steele and others in his party over a potential reelection bid.
Will he or won't he?
That's the question Republicans are asking today about RNC Chairman Michael Steele.
The embattled Steele is holding a teleconference for the 168 members of the committee today and the only question on anybody's mind is whether Steele will seek another two-year term when the group gathers next month.
Steele insiders tell FOX News' colleague Jake Gibson that the chairman will be bowing out, a view confirmed by the fact that Steele has done little in the way of paving the way for a campaign.
Several committee members tell Power Play that Steele has done none of the politicking with them that a candidate would be expected to do in advance of a run, especially a candidate with as tumultuous a tenure as Steele's.
But for a group of elder statesmen in the party engaged in an effort to get Steele to bow out, there is less certainty.
Steele is thought to have at least 30 votes going into the election, certainly enough to make it through the first couple of ballots, and also enough to wipe out much of the field on his way.
Plus, once these elections get to the fourth or fifth rounds, strange coalitions can begin to emerge, making Steele a long shot for reelection, yes, but not one that could be blithely discounted.
The consortium trying to woo Steele out of a bid includes supporters of multiple candidates, all of whom would be happy not to have to worry about Steele in the mix. And they still believe that he will declare his candidacy.
Steele, a showman at heart, has succeeded in creating maximal drama around his announcement this afternoon.
Karzai Won't Be Lead Character in Obama's Afghan Tale
"If I had to choose sides today, I'd choose the Taliban."
-- Afghan President Hamid Karzai after identifying his three main enemies as the Taliban, the United States and the international community to Gen. David Petraeus, U.S. Ambassador Karl Eikenberry and others according to the Washington Post.
There are no surprises expected from the Obama administration's review of its Afghan strategy due out this week. The report will trumpet progress and explain the need for an extended commitment to solidify and expand those gains.
What will matter more is how the president's party reacts to an assessment that will sound very much like what Americans heard from the Bush administration about Iraq, even in the voice of the same commander, Gen. David Petraeus.
One area in which liberals have been particularly critical of the Obama strategy is in controlling the kleptocratic tendencies of Afghanistan's government. Wikileaked reports of duffels of cash being spirited out of the country and assessments of President Hamid Karzai as a head case have done little to calm those fears.
But, as an insider report in today's Post shows, there are few alternatives. Undertaking regime change at this point is not only dangerous, but would likely lengthen the current surge timeline and increase U.S. casualties.
But with the Kabul government threatening to toss all security contractors, denouncing night raids by allied forces and negotiating a separate peace with insurgents, Karzai is, at best, an inconvenient friend.
The report is expected to mostly go avoid the Karazai regime, and focus on what the U.S. and our European allies are doing.
But, liberal Democrats, already wounded by Obama's high hand on tax negotiations with Republicans will likely still make much of our dependence on the mercurial Karazai when they attack the plan.
Iraqi Christians Flee Christmas Season Purge
"When the [Iraqi] army comes and says, ‘We cannot protect you,' what else can you believe?"
-- Diana Gorgiz, one of thousands of Iraqi Christians to flee the country during a surge in attacks on the community that began with the Oct. 31 massacre of 51 parishioners and two priests at a Baghdad church, speaking to the New York Times.
Iraq's Christians are fleeing the country in droves as a campaign of violence against them intensifies in Baghdad and Mosul.
Iraq was once home to a large Christian community, which dates back to the earliest days of the faith and enjoyed considerable protections under the Saddam regime. Any enemy of a Shia was a friend of his.
Terror strikes have steadily driven out Christians since 2003, but the past two months have seen what appears to be a concerted effort to run the holdouts out of the country.
The savage siege of a Baghdad church at the end of October has been followed by more bombings, assassinations and arsons, all targeted at Christians. Some have fled to safer sections in Sunni and Kurdish precincts while thousands more have headed to Turkey and other Christian enclaves in the Middle East.
Iraqi Christians tended to be some of the first and most enthusiastic helpers in the U.S. invasion and pacification efforts. Many Christian American GIs forged friendships with the community through Iraqi Christian translators and community leaders.
But the protection afforded them by American forces has not been replicated by the Iraqi military, prompting many to leave their homeland in search of safety.