House Democrats Reject Obama Tax Deal

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House Democrats voted to reject a White House tax compromise that would extend the full Bush tax cuts for two years in exchange for a year's worth of unemployment benefits and tax cuts for working families and businesses.

The deal still has life, with significant Republican support and the possibility that small tweaks might assuage the concerns of the progressive caucus. But what's the hold up here?

Who's playing the hostage game now?

Some of the House Democrats' concerns are, ostensibly, about policy. Rep. Jan Schakowsky wants the bill to include $250 checks to all seniors who won't , although that measure was voted down yesterday. Rep. Chris Van Hollen was rightly miffed by the estate tax deal. Others simply rejected the Bush tax cut concession to Republicans and have said they won't vote for any bill that wastes money on lower taxes for millionaires.

But some of the House complaints are, admittedly, about procedure, not policy. CNN reports:

"Wow did the [White House] mishandle this," a senior House Democratic Source told CNN. "Breathtaking. Members have major substantive concerns and they should have gently guided people to the finish line."

The word hostage has been thrown around in the Bush tax cut debate. First, Republicans were accused of holding the middle class tax hostage by demanding lower taxes for the rich -- or else, nothing. Now that the White House has struck a deal pairing the GOP plan with significant tax stimulus in 2011, it's the Democrats who stand accused of holding the US economy hostage by demanding higher taxes on the rich -- or else, nothing.

You could say that Democrats are just being strategic; that they've learned from the GOP's example that hostage situations tend to work out for the crazy looking person claiming he's capable of unspeakable things (like rejecting a $2,000 tax cut for the middle class). But with the January deadline looming and significant middle-class stimulus on the table, the party needs a endgame that gets us from today's news-splashy protest vote to a final bill.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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