Senate rejects million-dollar tax-cut compromise in Saturday session

United Senate Republicans joined a small handful of Democrats on Saturday to defeat a pair of proposals to extend some of the 2001 and 2003 tax cuts signed into law by President George W. Bush.

Voting nearly identically, the Senate twice failed to meet a 60-vote threshold necessary to move forward on both proposals. Meeting in a rare Saturday session after agreements fell through for a Friday vote, the results were widely expected. They were also somewhat premature, as the White House is still negotiating with congressional leaders on an alternative compromise proposal.

{mosads}The first proposal by Finance Committee Chairman Max Baucus (D-Mont.) would have extended the cuts only for individuals with incomes of up to $200,000 and families with incomes of up to $250,000. That failed by a vote of 53-36, with all GOP senators in opposition as well as Democrats Russ Feingold (Wis.), Joe Manchin (W.V.), Ben Nelson (Neb.) and Jim Webb (Va.) and Independent Joe Lieberman (Conn.).

The second proposal by Sen. Charles Schumer (D-N.Y.) would have extended the 2001 and 2003 tax cuts permanently for incomes of up to $1 million, among other provisions such as a one-year extension of unemployment benefits and cuts in capital gains, estate and dividend taxes. That failed, 53-37, with Sen. Tom Harkin (D-Iowa), Dick Durbin (D-Ill.) and Jay Rockefeller (D-W.Va.)  joining the ‘no’ votes.

Manchin said he opposed the first measure to allow time for a compromise on the second, which he supported.

“While I have said repeatedly I prefer all the tax cuts be extended, I was open to a common sense compromise that would extend the cuts to those who make up to $1 million – or 99.9 percent of West Virginians,” he said. “Unfortunately, that did not happen.”

Republicans had held firm in recent weeks that the tax cuts — designed to benefit the wealthiest Americans — should be permanently extended as a whole. Democrats had argued that only the cuts for the middle class should be extended, also blasting Republicans for failing to propose any spending cuts or revenue increases to pay for all of the cuts.

“We’ve all heard Republicans weep for the deficit they say they fear. Democrats agree that we need to do something about it,” said Majority Leader Harry Reid (D-Nev.). “So we have said: OK, how about cutting the deficit by admitting we can’t afford a tax break for millionaires and billionaires? A tax break that would add $4 trillion to the deficit.

“But what did Republicans do? They said, rather than reduce the deficit, we’d really rather give an unnecessary, unwanted and unaffordable handout to the richest of the rich.”

Democrats had also pointed out that all Americans would receive tax cuts under the proposal — incomes of less than $250,000 would receive a cut worth about $5,400, while incomes above $1 million would receive a $40,000 break.

But GOP Leader Mitch McConnell (Ky.) stuck to the Republican line, arguing that many millionaires are small-business owners, and that increasing their taxes will cost jobs.

“Today’s votes were a clear affront to the millions of Americans who were struggling to find work,” McConnell said. “This Saturday session is a total waste of the American people’s time. The votes we held today were opposed by every single Republican and several Democrats… And nothing we did today will stop the tax hikes, which are now less than a month away.”

Reid on Saturday also laid out the Senate’s pre-Christmas agenda, saying that Democrats plan to move forward next week on several votes including the DREAM Act to establish U.S. citizenship for children of illegal immigrants.

Speaking midway through a rare Saturday morning session on tax-cut votes, Reid said he will file procedural motions on Monday to set up cloture votes on Wednesday for an impeachment proceeding against a judge and various other procedural motions including the DREAM Act. Reid said he made the decision based on agreements with McConnell.

Reid said after Wednesday, he is hopeful that an agreement between the White House and congressional leaders will be in place regarding the 2001 and 2003 tax cuts, as well as a continuing resolution to keep funding the government. Reid said he also hoped to squeeze in votes on the START arms control treaty between the U.S. and Russia, as well as a defense authorization measure that includes a repeal of the “Don’t Ask, Don’t Tell” policy regarding gays in the military.

Alluding to last year’s Christmas Eve votes on the healthcare reform bill, Reid said he planned to adjourn the chamber on Friday, Dec. 17, for Christmas recess.

“We all know where we were last year on Christmas Eve,” Reid said. “We don’t want to be in the same place this Christmas Eve.”

This story was updated at 12:20 p.m.