Klobuchar: We can't afford to give the middle class a tax increase

U.S. House Democrats will meet Tuesday evening to discuss whether they have enough votes to alter President Obama's tax cut compromise. The Senate is expected to pass the bill and send it to the House as early as Tuesday night.

Democrats in the House want to change the estate-tax provision to make it less generous toward the rich, and House Democrats could target other parts of the bill that extends Bush-era tax cuts, and unemployment benefits.

Both of Minnesota's Democratic U.S. senators voted to advance the bill Monday. U.S. Senator Amy Klobuchar discussed the bill Tuesday with MPR's Steven John.

Steven John: You voted for the bill President Obama worked out with Republican leaders - with reservations. Do you think Democrats in the House should also go along with the president, who says is the best deal the current political climate will allow?

Sen. Amy Klobuchar: Well, with the way the rules work in the House, it's possible they'll be able to make some changes that we couldn't make here. And if they can do that, I'd be more than happy to vote for it, which would include allowing the tax rates for the wealthiest Americans to go back to the Clinton levels.

But in the end, when I looked at the bill we were presented with, and I had to decide if I was the very last vote that would make a decision on this bill, I decided that I couldn't afford to sock the middle class with an average $3,000 tax increase. So while I would I love to see some changes, I'm continuing to push for changes, including a long-term commitment to deficit reduction, something people haven't been talking about. This is something we can do next year, looking at the results of that debt commission. While I don't agree with everything, there's some things in there that could help guide us going forward.

John: So, if the House does succeed in getting some of the changes that you would support, how do you think that would affect the final passage of the bill?

Klobuchar: Well, obviously it would be difficult, but there is a possibility. Those are changes that, with the way the Senate rules work, we couldn't have done, but if they can make those changes and there's a general agreement, I would be more than happy, obviously. I voted for not just a $250,000 revert to the Clinton levels cut-off, but also a million dollars. So if they could do something like that, it would be helpful. It would be very helpful with the deficit.

John: Do you agree with the White House that the agreement hammered out with the Republicans should increase consumer spending and help the economy now and for the next several years?

Klobuchar: I spent the last week talking to economists, and a number of them, including Art Rolnick, formerly with the Federal Reserve in Minnesota, thought that it could be helpful with getting some money out there, especially the unemployment benefits to help the economy. I'm sure there will be some of that going on, but my major focus here was: What could we do to help the middle class to make sure they're not going to be put over the edge (and) lose their house or they lose their car or things like that. I mean that's what we're dealing with in many people's lives. And so, to me this was a difficult decision, but it was the right decision for the country.

John: One of the changes senators made to the tax cut package was extending the federal ethanol subsidy. Republican senator John McCain, for one, wasn't too happy about that. Why do you think the ethanol subsidy belonged in this package?

Klobuchar: Well, when you look at the ethanol industry in Minnesota, and bio-fuels as a whole - which, by the way, are getting more and more productive. We're finding ways to use less water (and) moving towards cellulosic ethanol. It employs nearly 8,400 people in our state. That is like one big Fortune 500 company. And so we wanted to make sure that when you look at all the subsidies that go to the oil companies that you weren't pulling the rug out from under one alternative for homegrown energy in this country, and that is bio-fuels.

John: Now it sounds like late in the day, the Senate is planning to press ahead on the U.S.-Russian nuclear treaty. It looks like you have a long evening ahead of you.

Klobuchar: We do. We're going to be voting on this tax bill, and then we head into the debate on the START treaty. Another thing I'd like to see done, in addition to those two things, would be the repeal of Don't Ask, Don't Tell. There's mounting support.

We now have 3 and maybe 5 Republicans supporting that repeal, actually saying that they will vote for repeal. So I'm feeling more positive about that, especially after the survey and the testimony that we heard from our top military officials and their comfort level with the repeal of this policy. We also have to work out a number of issues with various bills that are before us in the Congress.

John: Well, good luck on all that's ahead of you.

Klobuchar: Thank you very much.

(Interview edited and transcribed by MPR reporter Madeleine Baran)