Democrats' tax-cut plan clears the Senate

Vice President Biden, who was on hand in case his vote was needed, with Sen. Charles E. Schumer.
Vice President Biden, who was on hand in case his vote was needed, with Sen. Charles E. Schumer. (J. SCOTT APPLEWHITE / Associated Press)
Posted: July 26, 2012

WASHINGTON - Democrats pushed a yearlong extension of tax cuts for all but the highest-earning Americans through the Senate on Wednesday, giving President Obama and his party a political victory on a measure that is fated to go no further in Congress.

Senators approved the Democratic bill by a near party-line 51-48 vote, with Vice President Biden presiding over the chamber in case his vote was needed to break a tie. Minutes earlier, lawmakers voted 54-45 to kill a rival Republican package that would have included the wealthiest in the tax reductions.

The six senators from the Philadelphia region voted along party lines on both measures.

The $250 billion Democratic measure would extend tax cuts in 2013 for millions of Americans that otherwise would expire in January. But it would deny those reductions to individuals making more than $200,000 yearly and couples earning at least $250,000.

With control of the White House and Congress at stake in elections less than four months away, passage of the Democratic bill aligned the Senate with Obama's tax-cutting vision. Obama has made tax fairness - which he says should include tax increases on the rich - an overarching theme of his reelection campaign. Rejection of the measure would have been an embarrassment for the president and Senate Democrats.

The vote also served as a counterpoint to the GOP-run House, which next week will approve tax cuts nearly identical to the $405 billion Republican plan the Senate rejected Wednesday. And it lets Democrats argue that only the GOP stands in the way of tax cuts for millions of Americans.

"With the Senate's vote, the House Republicans are now the only people left in Washington holding hostage the middle-class tax cuts for 98 percent of Americans and nearly every small business owner," Obama said in a written statement after the vote.

House Speaker John A. Boehner (R., Ohio) restated his plan for next week's vote, citing the Democratic measure's tax boosts on higher earners. Republicans say those increases sap money from business owners who would otherwise create jobs.

"The House will vote next week to stop that tax hike, and until the Senate does the same, the threat to our economy remains," Boehner said in a written statement.

Congress' nonpartisan Joint Committee on Taxation has said just 3.5 percent of taxpayers with business income filing individual returns would be exposed to higher taxes next year under the Democratic bill. But such taxpayers account for 53 percent of reported business income on those returns.

In Wednesday's vote, two senators who will retire next year - Jim Webb (D., Va.) and Joe Lieberman, a Connecticut independent who usually votes with Democrats - were that party's only defectors on final passage.

Opposing both the Democratic and Republican measures were Sen. Scott Brown (R., Mass.), who faces a tough reelection fight in November, and Sen. Susan Collins (R., Maine). Sen. Mark Pryor (D., Ark.), who could have a tight reelection in 2014, voted for both the Republican and Democratic plans.

"If the wealthiest people in America can't get a tax break, the Senate Republicans say, 'No one gets a tax break,' " Sen. Richard J. Durbin of Illinois, Senate Democrats' No. 2 leader, said after the roll calls. "That was what these two votes tell us."

Republicans said the measure was all about Democratic posturing for the elections and would hurt the economy.

"Thank goodness it's not going anywhere, because it would be bad for the economy, the single worst thing we could do to the country," Senate Minority Leader Mitch McConnell (R., Ky.) said.

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