Senate Minority Leader Mitch McConnell joined House GOP leaders in calling on President Barack Obama to extend the Bush-era tax cuts. McConnell said the economy needs the certainty that such tax breaks provide.
According to a senior Democratic leadership aide, no decisions have been made about what Senate Democrats would do in response to House action on a one-year extension of all the cuts.
“We agree with the White House that Republicans run the risk of [sacrificing a] middle-class tax cut by linking it to a cut for millionaire and billionaires,” the aide said. “If they continue to insist on tax cuts for millionaires and billionaires, it will be clear whose side they are on.”
One likely scenario would be that Senate Republicans push for a vote on the yearlong extension and Senate Democrats allow it but put up their own alternative — possibly an extension of the cuts for those making $250,000 or less and $1 million or less.
Senate Democrats last held votes on those alternatives in 2010’s lame-duck session, with five Democrats voting with Republicans against each proposal. Both were defeated.
“The takeaway from those votes was that Republicans refused to compromise after Democrats offered to move in their direction by raising the threshold,” the aide said.
The aide argued that Republicans are seeking to shield themselves from that criticism by coming together on a one-year extension but cited recent internal polling showing that most Americans do not believe upper-income earners should keep the current tax cuts.
Still, most in the Capitol acknowledge the issue will not be solved before the elections.
In an interview Tuesday, House Majority Leader Eric Cantor (R-Va.) tacitly acknowledged that much, if not all, of the House’s actions between now and the elections will be aimed at providing signals to the markets and voters of where Republicans stand on economic issues.
Cantor said that “prior to the election we will move on this issue of taxes,” although he did not express any optimism about the Senate taking it up.
“We’re not under any illusions they’re going to embrace our type of tax reform ... which is part of why this election is so important,” he said, calling the tax vote “a stark signal that again we are a contrast with Obama.”