Senate blocks Obama's tax plan

 

Stephen Dinan-The Washington Times

Updated: 1:37 p.m. on Saturday, December 4, 2010

Republican Senate Minority Whip Jon Kyl, R-Ariz., arrives for a rare Saturday lame duck session of the U.S. Senate on Capitol Hill in Washington on Saturday, Dec. 4, 2010. The Senate agenda features a pair of votes: one on a proposal to extend all expiring tax cuts on individuals with incomes of less than $200,000 a year and married couples making less than $250,000; the other to renew them for all tax filers with incomes of less than $1 million. (AP Photo/Harry Hamburg)

 

The Senate blocked President Obama's and Democratic leaders' tax cut plans Saturday in a foreordained symbolic vote that now sends both sides back to the negotiating table to work out a viable deal.

A bipartisan filibuster, led by unified Republicans and joined by four Democrats and one independent, proved there isn't enough support to back Mr. Obama's preferred option to extend income tax cuts for couples making less than $250,000 and tax increases for those making more than that.

With that vote out of the way, attention turns back to the high-level working group Mr. Obama and congressional leaders set up this week to try to work out a solution. That group met three times already, but Sen. Jon Kyl, Arizona Republican and one of the negotiators, said it was clear to him that Democrats weren't going to negotiate until they had gone through the votes to prove to their political base that raising taxes on the wealthy wasn't viable.

"It's been very clear that we're not going to be negotiating anything until all of this political process is over, until the partisan votes have been cast," he said an hour before the votes in a rare weekend Senate session.

The negotiators seem to be headed toward an agreement that would extend all the 2001 and 2003 income tax cuts temporarily. Still to be decided was what sweeteners Democrats would secure to make swallowing the tax cuts more palatable. Possible options included extended unemployment benefits.

But emotions on both sides are running high, which is complicating matters.

Sen. Mary L. Landrieu, Louisiana Democrat, lashed out at Minority Leader Mitch McConnell, on the Senate floor, saying she didn't know how Democrats were supposed to negotiate with him after the Kentucky Republican said before the elections that his top priority is to see Mr. Obama defeated in 2012.

Speaking to reporters after the vote, Mr. Obama accused Republicans of holding the middle-class "hostage" in their push to extend all tax breaks.

"I am very disappointed that the Senate is not going to pass legislation that has already passed the House of Representatives that would make the middle class tax cuts permanent," he said. "Those provisions should have passed."

Tax cuts are just one of a host of issues still unresolved by Congress even after two weeks of a lame-duck session.

Senate Majority Leader Harry Reid, Nevada Democrat, said the Senate must act on tax cuts and the outstanding spending bills, and said he wants to see it take up a nuclear arms reduction treaty, a massive immigration bill, the defense policy bill that would overturn the ban on gay and lesbian troops, and several other measures sought by his party's liberal base.

In January, Republicans take control of the House and increase their clout in the Senate, likely cutting off chances for Democrats to secure many of those priorities.

The Senate on Saturday first rejected an option that would have extended the Bush tax cuts for individuals making less than $200,000 and couples making less than $250,000, but let the rates rise back to pre-2001 levels for everyone else. The vote was 53-46, leaving Democrats seven votes shy of the 60 needed to end the filibuster.

Next, senators blocked an option that would have raised the threshold for extended tax cuts to $1 million. That also fell seven votes shy of the threshold needed to overcome a filibuster.

"Republicans are willing to hold hostage the middle class tax cut so they can get a tax cut for the very wealthy," said Sen. Charles E. Schumer, New York Democrat, who offered the higher income threshold.

With Republicans unified for months, the votes' outcome was not in doubt. But Democrats held the votes anyway in response to liberal lawmakers who said they wanted to show the country exactly where lawmakers stoof.

On Thursday, House Democratic leaders used their tight control of the rules and their soon-to-expire overwhelming majority to force through the president's position.