Flexing their soon-to-expire legislative muscle, House Democrats on Thursday won a symbolic but potentially hollow victory to extend only some of the Bush-era tax cuts while letting taxes rise beginning next month for wealthier Americans.
The House voted 234-188 for the partial extension, but rank-and-file Republicans and Democrats alike acknowledged the real action was happening over on the Senate side and in a high-level working group, where the outlines of a deal are taking shape to temporarily extend all of the 2001 and 2003 income-tax cuts.
“I’m trying to catch my breath so I don’t refer to this maneuver going on today as chicken crap, all right?” House Minority Leader John A. Boehner of Ohio told reporters before the vote. “To roll this vote out today, it really is just - it’s what you think I was going to say, anyway.”
The tax-cut debate has been stalled for months as Democrats have fought internally over how to handle the thorny issue.
Republicans are united in calling for an extension of all of the Bush-era tax cuts, but some Democrats want to see them extended, while others, including the party’s leaders, say the country can afford to extend tax cuts only for individuals who make less than $200,000 or married couples earning less than $250,000.
Earlier this week, President Obama and bipartisan leaders in Congress agreed to form the working group, which has met several times and appears to be whittling down the options and settling on a temporary extension of all tax cuts. To sweeten the deal, Democrats would add an extension of unemployment benefits and several other tax breaks, such as Mr. Obama’s “Making Work Pay” tax credit.
The White House said a deal is still elusive, though.
Extending all the income-tax cuts would cut government revenue by $2.2 trillion over the next 10 years, while extending all but the top tax increases would total $1.5 trillion.
Democrats said the country can afford the smaller price tag but not the bigger one, and they used their massive majority in the House and their ability to control the rules to prevail Thursday.
Just three Republicans joined 231 Democrats in voting to extend only the lower-income taxes, while 20 Democrats joined 168 other Republicans in voting against the proposal. The three Republicans voting with Democrats were Reps. Ron Paul of Texas, Walter B. Jones of North Carolina and John J. “Jimmy” Duncan Jr. of Tennessee.
Much of the debate devolved into semantics. Republicans were furious Democrats gamed the rules to prohibit a vote on extending all the tax cuts, and said tax increases could hurt small-businesses owners, who often file their business income on their personal tax forms.
But Democrats charged Republicans with being hypocritical by saying they support tax cuts, yet voting against the only tax-cut option they were offered.
“The time has come. This is the moment to stand up and be counted on middle-income tax cuts,” said Ways and Means Committee Chairman Sander M. Levin, Michigan Democrat.
Rep. Paul Tonko, a Democrat, said his central New York district has 6,800 people making more than $250,000 a year, and 6,400 on unemployment will lose their benefits by the end of December. He said he would side with those on the lower tier.
But even some rank-and-file Democrats said the vote was a charade, since the real decision about a final agreement will be hashed out in the Senate, where the rules give Republicans far more power.
“This bill will pass over to the Senate, it’ll come back with the big tax cuts for the rich,” said Rep. Jim McDermott, Washington Democrat. He said he’ll vote against that eventual compromise.
Senate Majority Leader Harry Reid, Nevada Democrat, said he could decide to schedule a vote on the House bill, but Republicans have made clear they will filibuster that option.
Late Thursday, Senate Finance Committee Chairman Max Baucus, Montana Democrat, introduced a bill that would extend only lower- and middle-income tax cuts, extend the child tax credit and impose an estate tax rate of 45 percent. His bill also includes an extension of unemployment benefits.