House Democrats Reject Tax Deal in Nonbinding Vote

The House Democratic Caucus on Thursday voted against President Obama's tax deal with Congressional Republicans in its current form, <I>CNN</I> reported.
By Shanthi Bharatwaj ,

NEW YORK (

TheStreet

) -- The House Democratic caucus voted on Thursday to reject President Obama's tax deal as it was "currently written."

"This message today is very simple: That in the form that it was negotiated, it is not acceptable to the House Democratic caucus. It's as simple as that," said Democratic Congressman Chris Van Hollen.

The vote is nonbinding on House Speaker Nancy Pelosi as she decides whether to bring the issue to the floor. But it is further evidence of the strong opposition President Obama faces from House Democrats on the deal.

Earlier on Thursday, fifty four democrats sent a letter to Pelosi saying they were against the proposal to extend tax rates, calling the deal "grossly unfair."

Many democrats have been particularly upset with the "estate tax provision." President Obama agreed to exempt the first $5 million of a deceased person's estate, and to tax the rest at 35 percent. Congressional Democrats had expected a 45 percent tax rate on anything above $3.5 million.

The vote comes shortly after President Obama urged Congress earlier this morning to pass the agreement, saying it had the potential to create millions of jobs. It would determine whether the nation's economy "moves forward or backwards."

Markets have cheered the tax compromise, hoping that it would bring a speedier recovery to the economy.

-- Written by Shanthi Bharatwaj in New York

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