Published July 25, 2012
President Barack Obama's fellow Democrats in the Senate on Wednesday won passage of a bill to renew tax cuts for tens of millions of Americans while letting some rates rise for the wealthiest, in a symbolic vote.
The legislation, certain to be rejected by the Republican-controlled House of Representatives, lets Democrats claim in advance of the November 6 elections that they passed tax cuts for most Americans only to be stymied by Republicans.
"We're in the middle of a partisan war all wound up in the crucible of an election year for president," Democratic Senator Bill Nelson said.
The Senate rejected a Republican alternative with the help of at least two Republicans. That bill would have extended the lower rates for all income levels including earnings above the $250,000 threshold.
House Republicans will advance their own symbolic bill next week extending the lower rates for all income levels. Neither bill is expected to become law.
The real movement on U.S. tax policy likely will play out in the weeks after the elections and before the scheduled December 31 expiration of tax cuts signed by former President George W. Bush.
The Democratic legislation advances Obama's re-election theme that the nation's fiscal and economic woes should be healed with more sacrifice by the wealthy - those making more than $250,000 in adjusted income a year.
Democrats and Republicans have jousted all year over the idea, with Republicans arguing it would choke off job growth at a time of high unemployment.
Senate Majority Leader Harry Reid, a Democrat, argued, "The majority of Americans ... agree taxes should remain low for the middle class and the top 2 percent should pay their fair share to reduce the deficit."
Under the Democrats' bill, the Bush tax cuts would be extended through 2013, except on some income of the highest earners.
Income beyond the $250,000 threshold would be taxed at either 36 percent or 39.6 percent. That would be up from the current 33 percent and 36 percent for the top two income groups.
The Democratic bill is estimated to raise about $50 billion a year at a time of federal budget deficits that have been topping $1 trillion annually.
But the Senate cannot under the U.S. Constitution originate a tax measure -- that can only be done in the House -- which means the House will "blue slip" the Senate bill, or kill it.
"Ordinarily, Republicans would do everything we can to keep a plan as damaging as the Democrats' plan from passing," Senate Minority Leader Mitch McConnell said. "The only reason we won't block it today," he added, "is that we know it doesn't pass constitutional muster and won't become law, because it didn't originate in the House."