BREAKING: Senate shoots down tax extension

Senate Democrats’ attempt to move tax cuts for families making under $250,000 was shot down today by a vote of 53 to 36 (60 votes were needed for passage).

Democrats failed to break a Republican filibuster Saturday of two measures that would have ended Bush-era tax cuts for the wealthiest Americans, forcing both parties back to the negotiating table if they want to avert a tax hike next year for most Americans.

The doomed vote mean Democrats would ultimately need to strike a deal that runs contrary to their campaign promises over the past 10 years. Rather than eliminating the upper-end tax cuts, Democrats will likely cede to Republican demands to renew all of the Bush tax cuts for several years – a move that many in the party view as a major defeat.

A bill limiting the tax cuts to the first $250,000 of household income fell short of the 60-vote threshold needed to limit debate, 53 to 36. A second measure raising the income threshold to $1 million also failed, 53 to 37.

You can see the vote for the amendment increasing the income threshold to $1 million here. The differences between the two votes are Dick Durbin (D-IL), Tom Harkin (D-A) and Jay Rockefeller (D-WV) voted against the increase. Joe Manchin (D-WV), Ben Nelson (D-NE) and Jim Webb (D-VA) voted for it.

The argument by supporters of extending all tax cuts is that the economy is still struggling because of economic uncertainity. And they have the data on their side as yesterday’s jobs report came nowhere near expectations, and the unemployment rate inched up to 9.8%.

So while Democrats are making populist appeals, job creators, many of whom file as sole proprietors or S-Corps, are not doing much because they know that the money they could use to invest or hire new workers could be going away since tax hike is waiting for them on January 1, 2011.

 


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