In an extraordinary move today, Senate Democrats passed a bill to extend the Bush tax cuts for the middle class. The legislation triumphed 51-48. This vote sent a strong message that the Senate would be willing to allow the Bush Tax cuts for the rich to expire at the end of the year.
The Senate Republicans apparently got the message and agreed to drop their filibuster. Republicans were poised to prevent the bill from coming to a vote but Senator Harry Reid pushed the issue by performing complicated maneuvers on the Senate floor to line up at least 50 members of his caucus to pass Obama’s plan. The surprised Senate Minority Leader Mitch McConnell found himself forced to block a parallel opportunity for a majority vote on extending all the Bush tax cuts.
Heroes and villains:
Sens. Scott Brown (R-MA) and Susan Collins (R-ME) voted with Democrats. Sen. Mark Pryor (D-AR) crossed the aisle to vote with Republicans in support of legislation to pass all of the Bush tax cuts. Sens. Joe Lieberman (I-CT) and Jim Webb (D-VA) voted with Republicans against the measure. Vice President Joe Biden sat in as president of the Senate, in case his vote was needed to break a tie.
Obama’s Plan will prevent middle-class Americans from experiencing a tax hike of an average of $2,200. It does not extend cuts for those making $250, 000 or more. According to the NY Times, this represents the top 2% of tax payers in America.
What this means for the top 2% of Americans is a back-to-Clinton era tax level for an increase of between 3% and 4.6%. Investment income (capital gains) will increase by 8.8% for those making over $250,000.
On July 10th, Presidential Candidate, Mitt Romney regurgitated the standard GOP mantra, that this plan is an attack on small businesses and a job killer, despite the strong evidence to the contrary. In actuality the Bush tax cuts for the rich are a strain on small businesses because they eliminate integral advantages over larger corporations.
If House Republicans insist on making it one, they will object to the House adoption of the Senate Bill and create what is known as a blue-slip problem. The White House announced President Obama’s support of the Senate bill by releasing the following statement:
“All sides agree on the need to extend the tax cuts for the middle class… [T]his legislation reflects that consensus, and should not be held hostage while debating the merits of another tax cut for the wealthy.”