WHY WE CAN’T HAVE NICE THINGS…. The plan from the Senate Democratic leadership seemed like a good one, at least in terms of political strategy. Following up on House Democrats approving the middle-class-first tax plan — crafted by the Obama White House, and endorsed by most of the country — Senate Dems gathered this morning to force Republicans into a similar situation.
Would the GOP block permanent tax breaks for those making less than $250,000 a year, in order to protect lower top rates for the wealthiest Americans? Not surprisingly, we saw this morning that the answer is “yes.” The problem was that a few Dems decided to give Republicans a hand.
Senate Republicans have blocked legislation allowing taxes to rise on upper income taxpayers on Jan. 1.
The vote Saturday was 53-36 — seven short of the 60 needed to advance the measure.
Without action by Congress, all income tax cuts enacted when George W. Bush was president will expire at year’s end. The legislation backed by Senate Democrats would have kept the cuts in effect except on incomes over $200,000 for individuals and $250,000 for couples.
Just to clarify, a Senate majority supported the measure. But because the institution is so often ridiculous, when the margin is 53 votes to 36 votes, the 36 win.
The hope among many Dems was that it would offer a stark partisan contrast — Democrats fighting for the middle class, Republicans holding middle-class cuts hostage to protect the wealthy — but it didn’t quite work out that way, because Senate Dems were divided. Most of the party backed the middle-class-first approach, but five broke ranks and sided with the GOP. Four agreed with the Republican position — Joe Lieberman, Joe Manchin, Ben Nelson, and Jim Webb — while the fifth, Russ Feingold, opposed the Democratic proposal because he wants to see all of the Bush-era rates expire, including on those under $250k.
Be prepared for the new #1 Republican talking point: there’s “bipartisan opposition” to the tax policy crafted by the president and endorsed by most of the country.
One of the developments that has given Republicans leverage in the tax policy debate is the divisions among Democrats, a reality bolstered by this vote. When folks marvel at the White House feeling forced to “cave” on this, it’s worth remembering that the president and his team had hoped to see a united Democratic caucus backing them up.
What’s more, this should go without saying, but in case there were any doubts, every Republican who voted this morning opposed the popular tax plan.
So, what happens now? The Senate will soon vote on Sen. Chuck Schumer’s (D-N.Y.) other compromise, which would limit a higher tax rate to millionaires and billionaires exclusively, but it is also expected to fall victim to a GOP filibuster.
At that point, negotiations will continue through the administration’s working group, led by Treasury Secretary Timothy Geithner and White House budget director Jack Lew, which is tasked with striking some kind of deal with congressional leaders.
According to the Senate Republicans’ hostage plan unveiled Wednesday, the Senate will not be able to consider literally any other legislation until the GOP is satisfied with the resolution of the tax issue.