House Democrats, in a closed-door caucus Thursday, rejected the tax cut deal between the White House and Congressional Republicans. House Speaker Nancy Pelosi, D-Calif., said changes would need to be made before she would allow the bill to come to the House floor for a vote. Negotiations continue between Democrats, Republicans and the White House.
It's up to the Senate to make the next move. Majority Leader Harry Reid, D-Nev., must come up with a structure that will get 60 votes in the Senate and 218 votes in the House, where opposition is much stronger. Representative Chris Van Hollen of Maryland says he thinks there's still a very serious question whether this package can pass in the form it's in now.
A major question is the estate tax provision. Most Democrats would prefer to renew the tax, which lapsed last year, with a 45% rate on estates worth more than $3.5 million for individuals and $7 million for couples. The Obama-GOP deal would impose a 35% tax on estates larger than $5 million for individuals and $10 million for couples for the next two years.