Van Hollen: Tax deal will come to floor, but estate tax is sticking point for Dems

By Bridget Johnson - 12/12/10 09:55 AM ET

The assistant to Speaker Nancy Pelosi (D-Calif.) said Sunday that President Obama's tax compromise with Republicans will come to the House floor, despite House Democrats vowing to block the deal in a heated caucus meeting last week.

But Rep. Chris Van Hollen (D-Md.) said on "Fox News Sunday" that, even though the White House has said that the deal to extend the Bush-era tax cuts isn't open to negotiation, House Democrats are still going to make an effort to lop out at least one controversial provision: the estate tax.

"This bill will come to the floor of the House in some form," Van Hollen said. "...Most of us agree with most of what the president negotiated."

He insisted that Senate Republicans, in striking the deal with the president, had not insisted on a provision of setting the tax of 35 percent on estates over $5 million as a "central portion of this deal." Many Democrats are furious about the rate and want a 45 percent levy on $3.5 million estates and greater.

And as Democrats have long accused of Republicans of holding middle-class tax rates "hostage" while trying to broker a deal that included extensions for all income levels, Van Hollen accused the GOP of holding all of the tax-cut extensions "hostage" to keep the estate tax provision.

"I don't want to get into who is the hostage taker here," Rep. Paul Ryan (R-Wis.), the incoming chairman of the House Budget Committee, countered on the same program. 

Ryan accused Democrats of holding up the tax breaks and vowed that if they don't pass before the 111th Congress adjourns, Republicans will pass the tax rates retroactively as the first order of business in the new Congress.

"We're not interested in changing this deal," he said. "We're interested in passing this through... we don't think there should be an estate tax."

When asked whether the House would vote on the bill after it passes the Senate as expected, Van Hollen still left the door open for lawmakers to press changes by saying the "form it takes is yet to be decided."

"There will be an opportunity for the House to work its will," he said, adding he was "confident" that come January there would be no tax hikes for any income levels.

"We're not going to hold this thing up at the end of the day," said Van Hollen, who will be the ranking Democrat on the Budget Committee in the next Congress, as he steered back to the "essential" question of the estate tax. "We're going to make sure that question is put to the test."

Appearing on CNN's "State of the Union" Sunday, House Democratic Reps. Elijah Cummings (Md.) and Jim McDermott (Wash.) indicated they think the bill will pass but without a lot of Democratic support.

"I think it's quite possible the tax cut extension will be passed, but not with my vote," Cummings said.

Cummings and other Democrats have railed against the White House handling of the compromise, saying Obama shut Democrats out of the negotiations and gave Republicans too much.

Ryan said that the standoff between House Dems over Obama's deal with Republicans didn't bode well for the prospects of working bipartisanship in the next Congress, where Republicans will take over the House majority. "I think if the president actually bows to this pressure... how well will we be able to reach agreements that stick?"

He pushed backed against criticism of the deal from some on the right, admitting "there are parts of this bill I do not like."

"But the worst thing we can do is hit the economy with an across the board tax increase in January," he said. "If we don't pass this then we will have damage."

Ryan also brushed aside the notion that the tax deal is a second stimulus. "Only in Washington is not raising taxes considered a tax cut," he said. "If we are actually cutting tax rates then we'd have a stimulus."

Van Hollen said that the president was "outnegotiated" on the tax deal and that the form the bill will take when it comes to the floor is "something that's being discussed."

Ryan said "we might be able to move forward here," but cautioned Dems against "scuttling" the deal.

"Class warfare might make for good politics but it makes for rotten economics," he said.

Sam Youngman contributed to this report