Spurred by an Arizona congressman, House Democrats on Thursday rejected the package of tax cuts and unemployment benefits negotiated by President Obama with Republicans.

"The opinion of the majority of us is the president caved too early in the negotiations," said Rep. Raul Grijalva. He said Obama could - and should - have negotiated a better deal.

Grijalva said that without significant changes, the package is dead.

That means higher taxes for everyone beginning next year. It also means no extension of jobless aid for those who have exhausted their benefits.

But Grijalva said voters will have no one to blame but the Republicans who have insisted that the package include a two-year extension of the Bush-era tax cuts for everyone, including those making more than $250,000 a year.

"If they want to hold everything else political hostage, let them pay the political price," he said.

Rep. Gabrielle Giffords said Thursday's vote by Democrats was no surprise.

"Members are outraged," she said. "They have a right to be."

And Giffords said she is particularly concerned that the $900 billion package - including $70 billion her office says would go in tax relief to those at the top of the income scale - will dig the deficit hole too deep.

But she is not as convinced as Grijalva that an acceptable deal can't be put back together in the waning days of the session. That also is the belief of lame-duck House Speaker Nancy Pelosi.

"We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote," she said in a prepared statement.

Giffords also indicated she might be more willing than her fellow southern Arizona Democrat to go along with something that provides an extension of the lower taxes across the board. But Giffords said she has some things she wants in the package.

Most notably, she wants an extension of tax credits for renewable energy projects. Without congressional action, those credits will disappear at the end of the year.

"Solar energy is absolutely critical," Giffords said.

Grijalva also wants the credits extended. But both he and Giffords have a bigger problem with the deal Obama cut with the Republicans - and specifically with Arizona Republican Sen. Jon Kyl.

Congress voted during the Bush administration to phase out the federal estate tax in 2010. Right now the rate is zero.

But the same law repeals that repeal in 2011. Without action, the tax rate shoots back with a top rate of 55 percent with an exemption for the first $1 million, a rate Kyl press aide Ryan Patmintra called "confiscatory."

The Kyl plan brings the tax back - but only for a few: It provides a $5 million exemption with a tax rate of 35 percent.

Patmintra said it would be wrong to see the proposal as partisan, noting that it is identical to what Kyl co-sponsored last year with Arkansas Democrat Blanche Lincoln.

"The Lincoln-Kyl proposal is the only death tax proposal that has a bipartisan, majority support in the current Senate," Patmintra said.

Grijalva, however, said it shouldn't be part of this package.

But the real anger by Democrats is their belief the president sold them out on what has been an article of faith: the repeal of those Bush-era tax cuts for the most wealthy.

"We have been, since 2006, running on letting the extensions of the tax cuts for the very rich go away," Grijalva said. "That has been a platform that our party and the president ran on."

Obama conceded as much in a Tuesday press conference when asked if the plan amounted to a "flip-flop."

"This has to do with what can we get done right now," the president said, calling the situation "very stark."

"We can't get my preferred option through the Senate right now," Obama said, which would be to extend the tax cuts for everyone but the very rich. And the president said it was the only way to get Senate Republicans to go along with a 13-month extension of jobless benefits given the need for 60 votes in that chamber.

Grijalva, co-chair of the Congressional Progressive Caucus, doesn't see it that way.

He noted Republicans are set to take over the House in January. And Grijalva said that approving the deal the president negotiated with the Republicans will cost $900 billion, necessitating a vote to raise the nation's debt ceiling.

"Let THEM do it," he said of the Republicans. And Grijalva said they should have to justify demanding the continued tax relief to the "wealthiest 2 percent" of Americans.

Thursday's caucus vote came even after Vice President Joe Biden made a personal appeal. More to the point, Biden told Democrats that the key elements of the package were done, could not be altered and they should consider this the best deal possible, echoing the arguments Obama himself made earlier this week at that Tuesday press conference.

Efforts to get a comment from the other three Arizona House Democrats were unsuccessful.

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