By ALAN FRAM, Associated Press
WASHINGTON (AP) — Democrats pushed a yearlong extension of tax cuts for all but the highest-earning Americans through the Senate on Wednesday, giving President Barack Obama and his party a significant political victory on a measure that is fated to go no further in Congress.
Senators approved the Democratic bill by a near party-line 51-48 vote, with Vice President Joe Biden presiding over the chamber in case his vote was needed to break a tie. Minutes earlier, lawmakers voted 54-45 to kill a rival Republican package that would have included the best-off in the tax reductions.
The $250 billion Democratic measure would extend tax cuts in 2013 for millions of Americans that otherwise would expire in January. But it would deny those reductions to the earnings of individuals exceeding $200,000 yearly and of couples surpassing $250,000.
With control of the White House and Congress at stake in elections less than four months off, passage of the Democratic bill aligned the Senate with Obama's tax-cutting vision. Obama has made tax fairness — which includes tax increases on the rich — an overarching theme of his re-election campaign, and rejection of the measure would have been an embarrassment for the president and Senate Democrats.
The vote also served as a counterpoint to the GOP-run House, which next week will approve tax cuts nearly identical to the $405 billion Republican plan the Senate rejected Wednesday. And it lets Democrats argue that only the GOP stands in the way of tax cuts for millions of Americans.
"With the Senate's vote, the House Republicans are now the only people left in Washington holding hostage the middle-class tax cuts for 98 percent of Americans and nearly every small business owner," Obama said in a written statement after the vote.
House Speaker John Boehner, R-Ohio, restated his plan for next week's vote, citing the Democratic measure's tax boosts on higher earners. Republicans say those increases sap money from business owners who would otherwise create jobs, which Democrats say is overblown.
"The House will vote next week to stop that tax hike, and until the Senate does the same, the threat to our economy remains," Boehner said in a written statement.
Congress' nonpartisan Joint Committee on Taxation has said just 3.5 percent of taxpayers with business income filing individual returns would be exposed to higher taxes next year under the Democratic bill. But such taxpayers account for 53 percent of reported business income on those returns.
Wednesday's Senate vote also highlighted how both parties see the tax issue as a winning one: Democrats because they think it makes the GOP look like defenders of the rich, Republicans because they think it shows Democrats don't care about businesses.
It took just minutes for Democratic Senate campaign officials to send emails saying that Sen. Dean Heller, R-Nev., was "holding tax relief for the middle-class hostage by demanding more millionaire tax breaks." GOP Senate campaign operatives sent out similar emails, with one saying Sen. Jon Tester, D-Mont., had voted to "raise taxes on Montana farmers, ranchers & small business owners."
Tester and Heller are in tight re-election contests this November.
The two parties have been dueling over taxes all year. Few expect any real progress until after the November elections on preventing the tax cuts or averting deep budget cuts in January triggered by the failure of lawmakers to compromise last year on debt reduction.
In Wednesday's vote, two senators who will retire next year — Jim Webb, D-Va., and Joe Lieberman, a Connecticut independent who usually votes with Democrats — were that party's only defectors on final passage.
Opposing the GOP measure were Sen. Scott Brown, R-Mass., who faces a tough re-election fight in November, and Sen. Susan Collins, R-Maine. Sen. Mark Pryor, D-Ark., who could have a tight re-election in 2014, voted for both the Republican and Democratic plans.
"If the wealthiest people in America can't get a tax break, the Senate Republicans say, 'No one gets a tax break,'" Sen. Richard Durbin of Illinois, Senate Democrats' No. 2 leader, said after the roll calls. "That was what these two votes tell us."