House extends all Bush-era tax rates

The House approved a one-year extension of the Bush-era tax rates on Wednesday night, with 19 Democrats joining all but one Republican.

With lawmakers about to leave Washington for a five-week recess, the House action amounts to little more than a campaign message. Both parties have jumped headfirst into the tax debate, a confidence reflected in the political votes the Democratic-controlled Senate and GOP-led House have taken in consecutive weeks.

Retiring Rep. Timothy Johnson (Ill.) was the Republican who voted “no” in the 256-171 final tally.

{mosads}In a separate House vote, the GOP majority easily turned aside an attempt by Democrats to substitute a measure the Senate approved last week that would extend the rates only on annual family income up to $250,000. Nineteen Democrats — mostly members of the fiscally conservative Blue Dog Coalition — voted against their party’s plan, which garnered no Republican votes.

Though both parties won support from an overwhelming majority of their members, the Democrats who crossed over to back the GOP plan underscored the sensitive politics of the tax question with the election looming. Many were Blue Dogs in tough reelection races, including Reps. Larry Kissell (N.C.), Mike McIntyre (N.C.) and Jim Matheson (Utah). A Democrat running for Senate in Indiana, Rep. Joe Donnelly, also voted with the GOP.

While President Obama and Democrats have pushed to prevent a tax hike on the middle class and portrayed Republicans as patrons of the rich, GOP leaders argued that allowing taxes to rise on the wealthy and some small businesses would be, in the words of Speaker John Boehner (R-Ohio), “a very big mistake” in a weak economy.

“The choice is clear: You either want growth or you want more taxes,” House Majority Leader Eric Cantor (R-Va.) said before the vote.

Republicans have characterized their push to keep the rates in place for another year as a “bridge” to the comprehensive tax reform they plan to pursue in 2013. On Thursday, the House will vote on legislation setting up an expedited process for a tax overhaul next year, when Republicans hope they will have Mitt Romney in the White House and control of both chambers of Congress.

Yet, in a sign that Wednesday’s vote was more about message than substance, the House made no move to launch a formal House-Senate conference committee to resolve the differences between the bills, and there is little expectation that serious negotiations will take place before the election. The rates expire at the end of the year.

Democrats portrayed the Senate bill as uncontroversial, echoing the president in urging Congress to simply lock in a policy that was not in dispute.

The Senate vote also saw defections — Sens. Scott Brown (R-Mass.) and Susan Collins (R-Maine) voted with Democrats, while Sen. Mark Pryor (D-Ark.) voted with Republicans.

“There isn’t … a person in this room who doesn’t support tax cuts for the middle class,” House Minority Leader Nancy Pelosi (D-Calif.) said in a floor speech. “Why can’t we just do that? Do what we can agree upon right now.”

She also made clear, however, that the Democratic plan would pave the way for higher taxes on the wealthy, which she argued would help close the budget gap. By voting for the GOP plan, Pelosi said, “House Republicans are giving more tax breaks to the richest 2 percent — tax breaks they don’t need and we can’t afford.”

Republicans offered repeated reminders of the tax deal of December 2010, when Obama and Democratic leaders cited the struggling economy as a reason why the president reneged on a campaign pledge and agreed to an across-the-board extension of the Bush rates. The GOP whip, Rep. Kevin McCarthy (Calif.), pointed out that 86 House Democrats who are still serving voted for that agreement.

“Two years ago, the president said we shouldn’t raise taxes in this time of a slow economy. I agreed with the president,” Boehner said in a rare floor speech. “And here we are, some 18 months later — economic growth is actually slower than it was when President Obama made those remarks, and yet the president wants to go out and raise taxes on the so-called rich.”

Boehner has warned about the looming “fiscal cliff” at the end of the year, and on Wednesday morning sent a letter to Senate Majority Leader Harry Reid (D-Nev.) offering to call the House back into session during its August recess if the Senate takes action to prevent a tax hike and scheduled defense cuts at the end of the year.

“If the Senate follows the House in passing legislation to stop the entire tax hike — including the small-business tax hike — in a manner that requires House approval before it can be sent to the president, it is our commitment that the House will reconvene immediately to ensure the measure is enacted at the earliest opportunity,” Boehner and three other House GOP leaders wrote in the letter. “But in order to avert the threat to our economy, the Senate must join the House in acting to stop the entire tax increase.”

Boehner also warned Reid that Republicans will not support a move simply to delay the upcoming defense cuts for a few months to buy more time. “A Senate vote to simply postpone the sequester, rather than replace it with common-sense cuts and reforms, is unworkable and unacceptable,” his letter states.

But like Wednesday’s House vote, the letter is unlikely to have much impact. Reid rejected it in a letter of his own later in the day. Democratic leaders and the White House have vowed not to extend tax rates for the wealthy, and have demanded that Republicans agree to revenue increases in any deal to replace the scheduled defense cuts, which even Democrats have warned could hurt the military. Democrats also want to replace automatic cuts to domestic programs scheduled to take place as part of the 2011 Budget Control Act.

Boehner told House Republicans in a closed-door meeting that the letter’s message to Democrats was simple: “Translation: We’re putting this right at your doorstep. You own it. ”

— Pete Kasperowicz contributed.