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Senate Blocks Democrats on Middle Class Tax Cut; Obama Still Confident of Deal

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Republican senators, joined by a handful of moderate Democrats, led a filibuster Saturday to block consideration of two Democratic proposals to permanently extend the expiring Bush tax cuts for all but the highest earners, arguing that the Bush-era cuts should be extended for all income levels.

In a rare weekend session, senators voted 36 to 53 against moving to a House-passed bill that would have extended the Bush-era tax reductions for everyone making less than $250,000, as well as the first $250,000 of income for higher earners. That was seven votes short of the three-fifths majority (60) needed to break the filibuster. Four Democrats-- Joe Manchin of West Virginia, Jim Webb of Virginia, Ben Nelson of Nebraska, and Russ Feingold of Wisconsin-- voted with the Republicans to block action on the bill, as did Sen. Joe Lieberman, an independent from Connecticut.

Later, by a 37 to 53 vote, the Senate also stopped consideration of "the Millionaires' Tax," a bill that would have extended the Bush tax cuts for every American making less than $1 million per year, while returning income taxes to 2001 levels for everyone making more than $1 million annually. Democratic Sens. Richard Durbin of Illinois, Tom Harkin of Iowa, Jay Rockefeller of West Virginia and Feingold, along with Lieberman, voted with the Republicans.

President Obama said he was "very disappointed" in the Senate votes, but he added that what happened Saturday "cannot be the end of the discussion" on tax relief. He vowed to continue working for a compromise with the Republican side, "to give the American people the peace of mind that their taxes will not go up on Jan. 1" -- the time set in law for the tax cuts to expire without congressional action. "I'm confident we can do it," he said.

Sen. Charles Schumer (D-N.Y.) sponsored the bill that applied to people with more than $1 million in annual income only and defended his proposal Saturday as an important way to address the nation's ballooning debt.

"It seems to me that about the best way to reduce the deficit is not to give $300 billion dollars of tax breaks to the 315,000 Americans whose income is over $1 million dollars." Schumer said. "It's not that we want to punish wealthy people. We want to praise them. But they're doing fine."

Senate Minority Leader Mitch McConnell (R-Ky.)Sen. Bernie Sanders, the liberal Vermont independent who caucuses with the Democrats, argued that the Senate could better protect the economy by extending the lapsed unemployment benefits that Republicans are blocking because Democrats have not offered cuts elsewhere in the federal government to pay for them. Sanders framed the two issues together as one a question of basic fairness.

"I think this is a very easy vote. The vote is to extend the tax breaks to 98 percent of Americans, many of whom are struggling," Sanders said. "But lets us not give tax breaks today to the millionaires and billionaires of this country, who in many ways have never had it so good."

But while the Democrats argued that their legislation would make the tax code more fair, Senate Minority Leader Mitch McConnell said that all Americans should have have their tax rates kept at current levels. He also dismissed the entire Saturday session as a political exercise, since the Democrats knew the proposals would draw a Republican filibuster, blocking final action.

"Americans don't want to see meaningless theatrics in Congress," McConnell (R-Ky.) said. "They want us to do something about the economy... This Saturday session is a total waste of the American people's time."

Iowa Sen. Charles Grassley, the top Republican on the tax-writing Senate Finance Committee agreed. "Here we are on a Saturday. We don't need a dog and pony show on a Saturday when we ought to be giving certainty to the economy," he said. "The bottom line is this: Stop the tax hikes."

As Democrats and Republicans continue to spar over the issue, time is running out for them to find a solution. If Congress fails to come to an agreement before the end of the year, rates for all Americans will return to 2001 levels when the Bush-era policy expires after Dec. 31. In addition to income tax hikes, the changes would increase the estate tax, the marriage penalty tax, taxes on dividends and capital gains, and the Alternative Minimum Tax.

While Democrats pushed their floor votes this week, a bipartisan group of senators and House members met behind closed doors with the Obama administration to hammer out a compromise on the tax issue. Vice President Joe Biden, filling in Saturday for Obama in the White House weekly address, made no mention of the negotiations, but said if the tax cuts aren't extended "millions of middle-class families will see a big bite out of their paychecks starting Jan. 1. And that's the last thing we should let happen."

Media reports indicated late last week that a deal had been reached to pass a two-year extension of all the tax cuts, along with a one-year extension of unemployment benefits, and the also new START nuclear arms treaty. But senior Senate aides familiar with the negotiations tell Politics Daily that Republicans feel little pressure to give in to Democratic priorities when they feel confident they can prevail on the tax issue without concessions.

Sen. Jon Kyl (R-Ariz.) said Saturday morning that no deal would be reached until Democrats stop scheduling votes on issues they know Republicans will oppose.

"The fact is we're not going to be negotiating anything until all of this political process is over, until all of the political votes have been cast and then, and only then, can we seriously negotiate how we're going to resolve the issue." Kyl said.

Just before the vote, an exasperated Senate Majority Leader Harry Reid spoke from the Senate floor to accuse Republicans of changing their demands during negotiations and compared GOP senators to Lucy, the character in the Peanuts comic strip who yanks the football out from Charlie Brown before he can kick it.

"Our economy isn't a cartoon. The jobs of hardworking Americans aren't political footballs," Reid said. "And instead of taking their ball and going home when they don't get their way, it's time Republicans realize that we're not here to embarrass one another. We're here to get things done. We're here to help our economy grow once again."

Reid went on. "It's time Republicans recognize that, like Charlie Brown and Lucy, we're on the same team."

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ciwfamlaw1

How about tax cuts for all! Why should the Politicians be able to spend my money? What about the same heathcare and retirement for the Politicians that we all have? America was, and still should be, about working hard and realizing your dreams. That doesn't mean work hard, save and give up to get where you are, and then some political (or media type) wants to label you as "rich" and tax you more. Hey, how about just that flat tax idea? Pelosi get real, stop being such a politician.

December 09 2010 at 2:15 PM Report abuse +2 rate up rate down Reply
dlwoodford

Where do all these old geezers come from? What do they want now that they are not getting now? People are losing homes and going hungary waiting for these old codgers to fight it out and make up their minds. That includes the females to. I could really learn to hate Pelosi.

December 09 2010 at 10:46 AM Report abuse +1 rate up rate down Reply
Sheba

well if no one knew the difference between dems and repubs...is can be plainly seen now....and those dems that vote with the repubs need to switch parties...

December 09 2010 at 10:39 AM Report abuse rate up rate down Reply
luludevol

The top 1% alone now owns 47% of America's wealth. The wealthiest 25% of US households now own 87% of the country's wealth - leaving the rest of us to compete for the remaining 13%. 400 Richest Americans Got Richer This Year, As Most Americans' Net Worth Tanked according to Forbes 91.9% of Americans receive NO inheritanc­e at all and are not impacted by the Estate Tax (dubbed by the mouthpieces of the very wealthy, the "death tax".) What are these wealthy elite (who purchased politicians in the last election) doing with all their wealth? How about: A diamond-encrusted saucepan with a gold-plated handle - the price: just a bit over $200,000. A chocolate dessert which includes 5 grams of 23 karat edible gold and is served in an edible gold lined goblet and at the base placed a gold bracelet of an 18 karat with white diamonds of 1 karat. Luxury Yacht Sales Up Among World's Economic Elite - worlds largest thus far is 281 feet. BILLIONAIRES are going to ever greater depths to outdo each other: they are now competing to have the biggest private luxury submarines that money can buy. Ten million Americans, including almost 4 million children, don't get enough to eat, according to a new study from Cornell University and the National Center for Health Statistics (NCHS) of the Centers for Disease Control and Prevention. *** We can have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can't have both. - Justice Louis D. Brandeis

December 08 2010 at 5:00 AM Report abuse +1 rate up rate down Reply
1 reply to luludevol's comment
AZ Stang

Great points! Great wealth concentrated in the hands of a few is Mexico. Creating a larger and larger welfare state through entitlements will be the end of the middle class, and the end of the nation.

December 11 2010 at 9:37 AM Report abuse rate up rate down Reply
crimson00king

Shame on the GOP and their supporters and they call themselves American. Pitiful behavior even for Republican standards. Risking our national security by borrowing more money from the Chinese just to give rich more tax breaks. Nothing but pure extortion. I will be willing to bet that when the younger voters return to the polls 2012 they will be sending a clear message to the GOP and Obama and the few Democrats that have sold out the majority of this country. Make sure you contact your senators congressmen and the White House and let them know how you feel it takes mins. to just e-mail them your thoughts.

December 06 2010 at 8:39 PM Report abuse -1 rate up rate down Reply
carl

Extending unemployment benefits another 13 months to 3 years is absurd! What then? Another extension? When does it end? Sorry but we don't have the money. I would compare it to buying a drunk a drink. It dosen't solve anything, just delays the inevitable, plus we go futher in debt. As a nation we are in serious financial trouble and face some very diffucult decisions that need to be made NOW. It's a known fact that people will not look for work until their benefits expire. California is borrowing $42 million a day to support the unemployed. How long will that work? Paying people to stay home seems like a excellent place to start.

December 06 2010 at 6:56 PM Report abuse +2 rate up rate down Reply
1 reply to carl's comment
pttypinkley

Carl, I hope to help you understand not everyone is abusing the system. My husband is 54 yo, and has worked his whole adult life. He's in a good market (IT) and never had trouble finding a job before. He has been laid off since Feb, we have not had health insurance since then. I work two part time jobs to help sustain us. I was losing sleep wondering if the unemployment benefits would be extended. Now, I have some hope I will be able to stay in my home, with my two children too. We hope everyday he will find something so we DON'T have to get the mere pittance we are getting, but is keeping a roof over our heads, for now. So, I wish people with your attitude would just look around and know, there are people that are destitute, or practically destitute, hoping the jobs come around so we can live the life we used to live.

December 06 2010 at 7:13 PM Report abuse +1 rate up rate down Reply
Rebecca

I find it hilarious that the GOP sees nothing wrong with increasing our deficit by $700M for tax cuts to the wealthy but they can't find it in their hearts to help the unemployed who are out of work through no fault of their own--and at a fraction of the cost, too. I voted for one republican in '08--a congressman who lost--and I'll never vote for another.

December 06 2010 at 7:35 AM Report abuse +2 rate up rate down Reply
jagcapt007

I profusely disagree. Let the unemployed go on welfare. That is precisely why we created that safety net. Three years of unemployment benefits even Denmark, The most socialistic nation in the world no longer supports. If they haven't found a job in two years, one more year isn't going to help. ALL economist agree, our economy is destitute for several years. I also prefer ALL those Bush tax cuts to end, as well as killing the EIC tax credit, until an absolute balanced budget for a decade is created. We need to demand a balanced budget, or 10% less spending in their next budget until we repaid our national debt downwards. People are going to suffer, but if we refuse America will be a third world nation. You can't imprison wealth, but you an most profusely encourage it to move elsewhere. I would hope ALL of us took up basic mathematics, regardless of politics. Today in 2010 the America dollar is worth $.67 compared to a Food Stamp dollar which is worth $1.76 depending on politics. I lived in a socialist country, it got real ugly, real fast, when the economy trashed. We can't spend our way out of a depression, any more than Wall Street can profit from subprime loans. Eventually that Genocide must begin, when payments are past due.

December 06 2010 at 12:16 AM Report abuse +2 rate up rate down Reply
JBD

The younger people in this country might give some serious thought to what Delores has said. Most of you say "poor thing" and go back to "Dancing With The Stars." If the rulers of our country (the rich and big corporations) get what they have been pushing for for years, our country will go back to the times of the "Robber Barons," we will become a banana republic, and you will not only have no retirement or medical care yourself, but you will have to take care of your old parents who have none either. Or you can just watch them die in the streets...

December 05 2010 at 9:44 PM Report abuse +3 rate up rate down Reply
Delores

I am a74year old widow on social securityand some friends of mine just lost their jobs in West Palm Beach. Then, the house they were renting was foreclosed and they were left homeless. I let them move in with me until they can get on their feet again, but it is hard at 60 years old to start all over. He was a construction foreman and she was a school teacher. No jobs out there. I don't know how long I can hold on with 2 extra people in my house. My electric and water bills along with food and necessities is very hard to keep up; The Senate NEEDS to PASS the extended unemployment benefits. At least that would help me stay afloat and wouldn't put 3 more people besides them on the street. I have a disabled son as well. HELP! HELP! HELP! Can't our government see what is going on and do something besides playing politics, and disagreeing with one another. Do the job you were voted in to do. I am a Republican, and they are mostly the ones opposing the tax cuts and unemployment benefit extentions. Delores E.

December 05 2010 at 8:54 PM Report abuse +3 rate up rate down Reply

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