WASHINGTON - House Democrats rejected an agreement reached between President Obama and Republicans on extending the Bush tax cuts, voting against taking up the deal as it stands now.
The Bush tax cuts will expire in just weeks. If they expire, taxes on nearly every American will go up. Still, President Obama has had a tough sell with liberal Democrats who are usually his allies.
"We will not bring it to the floor in its current form," Rep. Peter DeFazio, D-Ore., said.
A Double-Dip Recession?
On Wednesday night, Obama dispatched Vice President Joe Biden to Capitol Hill to calm the many in his own party who are upset over the deal.
"We were told yesterday by the vice president this was a take it or leave it deal. We're saying leave it," Rep. Lloyd Dogget, D-Texas, said.
Earlier Thursday, the White House issued a stark warning to Democrats: If they don't accept the tax compromise forged with Republicans, they could possibly throw the economy into a double-dip recession.
"If they don't pass this bill in the next couple of weeks, it would materially increase the risk the economy would stall out and we would have a double dip," White House Economic Adviser Larry Summers said.
"This agreement would boost economic growth in the coming years and has the potential to create millions of jobs," Obama said. "The average American family will start 2011 knowing there will be more money to pay the bills each month."
But with many economists suggesting this deal could be much more stimulating than the actual stimulus package of Obama's early White House days, other Democrats and many Republicans say it's time to back it.
"We've reached a bipartisan agreement. It's time Democrats in Congress reach a similar conclusion and enable us to act for the good of the whole country," House Minority Leader Mitch McConnell, R-Ky., said.
Dems: The President Caved
But those angry Democrats feel the president caved on accepting tax breaks for the well-to-do and wealthy, and many are rebuffing the President.
"I have to tell you something: it's only going to get worse for the president if he allows himself to be pushed around with deals like this," Rep. Anthony Weiner, D-N.Y., told ABC News' "Good Morning America."
The White House said if lawmakers aren't willing to start talking compromise, most American's taxes are going to end up taking a big leap next year.
"If one side takes out what they don't like and the other side takes out what they don't like, we're going to have that," White House Press Secretary Robert Gibb's said, lifting up a blank piece of paper. "And that...a blank piece of paper...is not going to prevent middle-class taxes from going up."
Many economists feel this deal could add as much as one percent to economic growth next year.