House Democratic leaders have scheduled a political showdown over the Bush-era tax cuts that expire at the end of the month. House Majority Leader Steny Hoyer, D-Md., said the chamber will vote Thursday on a plan to permanently extend the tax cuts, but only to individuals earning less than $200,000 and couples making less than $250,000.
“I am very hopeful that we will pass this,” Hoyer said. “Nobody wants working Americans to get any kind of an increase on January 1.”
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Republicans, who said they would oppose any bill that does not extend the tax cut to wealthier taxpayers, immediately denounced the Democratic plan to take up the truncated bill.
House Minority Whip Eric Cantor, R-Va., called the move “political chicanery and a non-starter.”
Cantor pointed out that many Democrats back extending the tax cuts to all income levels and called for a vote on such a plan.
The Democratic plan to only partially extend the cuts will put Republicans and dozens of moderate Democrats in a difficult position. If they vote for the bill, they will be giving up any leverage they have to pass one that includes all taxpayers. If they oppose it, they could be criticized for voting against a middle class tax cut.
Republicans’ best chance of defeating the Democratic bill would be to amend it on the floor so that it includes all taxpayers, but Hoyer said he would try to block such amendments.
“We don’t want to muddle our message and we think we won’t muddle our message,” Hoyer said.
As lawmakers argued over the tax cuts in the House, a bipartisan group of House and Senate lawmakers huddled in private with Treasury Secretary Tim Geithner and Office of Management and Budget Director Jack Lew to devise a tax cut compromise that could be voted on during the current lame-duck session.
Among the ideas lawmakers have been weighing is one that would pair a temporary extension of the tax cuts for all income levels to a measure that would extend unemployment benefits for millions of out-of-work Americans. Unemployment benefits expired on Nov. 30 and efforts to extend them have stalled after Republicans complained about how much an extension would add to the budget deficit.
The bipartisan talks sprang from a White House meeting on Tuesday with Democratic and GOP leaders meant to smooth over partisan acrimony, but by Wednesday morning, the two sides were positioning themselves for more fighting.
Senate Minority Leader Mitch McConnell, R-Ky., announced that he would block any Senate bill other than those intended to fund the federal government or extend the tax cuts to all income levels.
“Given our struggling economy, preventing the tax increase and providing economic certainty should be our top priority,” McConnell said in a letter signed by every Senate Republican and sent to Senate Majority Leader Harry Reid, D-Nev.
