By Lori Montgomery
Washington Post Staff Writer
Thursday, September 23, 2010; 9:11 PM
Senate leaders on Thursday abandoned plans to extend a broad array of tax cuts before the November elections, delaying a vote that could affect tax rates for virtually every American.
"Democrats believe we must permanently extend tax cuts for the middle-class before they expire at the end of the year, and we will," Jim Manley, a spokesman for Senate Majority Leader Harry M. Reid (D-Nev.), said in a statement. "Unfortunately, to this point we have received no cooperation from Republicans to do so . . . We will come back in November and stay in session as long as it takes to get this done."
Unless Congress acts, tax cuts enacted during the Bush administration are due to expire in January, raising income tax rates across the board.
Republicans want to permanently extend the cuts, increasing borrowing by nearly $4 trillion over the next decade. They say they are not holding up debate and that Democrats have yet to file a bill.
"We hope Democrats . . . will cooperate despite their burning desire to raise taxes on small businesses and families in the middle of a recession," said Don Stewart, a spokesman for Sen. Mitch McConnell (R-Ky.).
President Obama wants to extend the cuts only on income under $250,000 a year for families, a proposal that would reduce revenues by about $3 trillion by 2020.
Senate Democrats had been preparing a less expensive bill that would extend some tax provisions only temporarily. Just a few weeks ago, Democratic leaders in both the House and Senate argued that a pre-election tax battle would put Republicans on the defensive, forcing them to justify borrowing billions of dollars to pay for tax breaks for the nation's 3 million wealthiest families.
Some Republicans were nervous about that prospect. But Democrats were equally divided, with many conservatives arguing that the ailing economy - and a contentious election season - made this a bad time to raise anyone's taxes.
Democratic leaders also faced a further difficulty. Given the balance of power in the Senate, Democrats cannot push anything through the chamber without Republican cooperation.
Among those senators who want to see the tax cuts for the wealthy expire, some acknowledged their odds of success might be better after the election, when retiring Republicans may be more willing to break with party leaders.
"The question is, in this environment where everything is stalemated . . .do we want to go through the motions right now, knowing that it would be very difficult to get it done?" asked Sen. Debbie Stabenow (D-Mich.), a proponent of ending tax breaks for the wealthy. "Or do we set this up for the first vote when we come back and see if there's any more willingness" to break the logjam?
Stabenow spoke before an hour-long meeting Thursday in which Senate Democrats debated the issue. No decision was reached until Reid pulled the plug on the tax debate hours later. But several key lawmakers, including Sen. Richard J. Durbin (D-Ill.), the Senate's second-ranking Democrat, signaled that action before the election was unlikely.
"The reality is we are not going to pass what needs to be passed to change this either in the Senate or in the House before the election," Durbin told reporters. Politically, "if you bring it up and don't pass it, does that help you or hurt you? If you don't bring it up, does that help you or hurt you? You can argue it round, you can argue it square. But the reality is nothing's going to happen before the election."
Republicans criticized the delay. "It's unfortunate that politics has gotten in the way of making sure the American people's taxes don't go up. Our economy remains weak and we should take up legislation to provide our job creators and small businesses with economic certainty by stopping these tax hikes," said Sen. Orrin G. Hatch (R-Utah). "I hope the White House and its allies on Capitol Hill change their mind, because there's a lot at stake."
House leaders have yet to decide whether to stage a vote on the Bush tax cuts before adjourning next week. But Majority Leader Steny H. Hoyer (D-Md.) signaled Thursday that the prospects are unlikely, though he vowed to address the matter no later than a lame-duck session set to start Nov. 15.
"There will be no tax increase for middle-income Americans, whether we do it today or six weeks from today," Hoyer told reporters. "We will make sure there is no middle-class tax increase before this year ends."