Senate Democrats, unable to secure enough votes within their own party to pass President Obama’s $447 billion jobs plan, rewrote a key component of that plan to replace the higher taxes Obama wanted on households earning $250,000 or more a year with a new 5 percent surcharge on those earning $1 million or more annually.
The change, lawmakers said Wednesday, ensures that the tax increase hits only the nation’s wealthiest taxpayers, a group Obama insists is not paying its fair share.
“Drawing the line at $1 million is the right thing to do,” Sen. Charles Schumer, D-N.Y., said. “In the eyes of many, it is hard to ask more of households that make $250,000 or $300,000 a year. Many of them are not rich and in large parts of the country that kind of income doesn’t get you a big home, lots of vacation and anything else that is associated with wealth in America.”
Narrowing the scope of the tax increase is expected to increase Democrats’ chances of passing Obama’s jobs plan. Moderate Democrats, particularly those up for re-election next year in swing states, have opposed Obama’s tax increase because it hit too many middle class families. The new plan would affect a much narrower group of taxpayers.
Senate Democrats also struck from the plan a proposal to raise taxes on oil companies, which was opposed by some of their members.
Even with the changes, there is no guarantee of passage. Sen. Ben Nelson, D-Neb., is among those who vowed not to raise any taxes and Democrats are going to need at least some Republican support to get the plan through the Senate.
Senate Majority Leader Harry Reid, D-Nev., said the 5 percent surcharge will cover the entire cost of the jobs bill, including a payroll tax cut, road and bridge repair projects, and money for local governments.
Trying to back Republicans into a political corner, Democrats touted the revised jobs bill as one the GOP can not reject given the broad public support polls show for raising taxes on millionaires. Democratic Senate leaders said they would take up the legislation within days.
“Republicans will be hard pressed to explain why they would allow teachers and firefighters to be laid off rather than have millionaires and billionaires pay their fair share,” Schumer said. “This is the contrast that will be on display in the Senate next week.”
Senate Republican leaders believe the tax increase will hurt small businesses and won’t back the measure, an aide told The Washington Examiner. In the House, where Republicans hold a majority, the proposal has virtually no chance of passing.
“I think most people think that it is counterintuitive to raise taxes in order to attain economic growth,” House Majority Leader Eric Cantor, R-Va., told Bloomberg News Wednesday.
Republicans have taunted Senate Democrats over the lack of support within their own party for Obama’s plan. To highlight Democratic opposition to Obama’s plan, Senate Minority Leader Mitch McConnell, R-Ky., this week called for an immediate vote on the jobs bill. Reid blocked the move, calling it a “political stunt.”
But Republicans say they were merely responding to the president, who in campaign speeches in recent days has accused the GOP of blocking his bill.
