Speaker John Boehner has urged the Senate to follow the Houses lead by passing legislation to extend all current tax rates into next year, arguing that allowing tax rates to increase would further hurt the economy.
“We believe ... that we could fashion a bill in September, which we told the Majority Leader we would be able to do,” said Sen. Kay Bailey Hutchison (Texas), one of several GOP Senators backing an alternative bill.
The Republican-led House’s last significant effort before heading out the door was to pass a drought aid measure, which Senate Agriculture Chairwoman Debbie Stabenow refused to take up in an effort to keep pressure on House GOP leaders to take up a five-year farm bill.
“We are committed to focusing on a farm bill,” the Michigan Democrat said. “That’s what agriculture wants us to do. They’re not up here arguing for a partial disaster assistance program — that’s not what they’re doing.”
However, Sen. Bob Corker (R-Tenn.) said of both chambers departing for recess on Thursday, “We can’t even act like we are doing anything.”
Nevertheless, both the House and Senate began to lay the groundwork last month for extending the 2001 and 2003 tax cuts, which will be a top campaign issue. The tax cuts are set to expire at the beginning of next year unless Congress acts in a likely post-election, lame-duck session. But Republicans and Democrats remain at odds over whether to extend all or part of the tax rates.
The House passed a measure 256-171 last week that would extend the cuts for all taxpayers for one year to give Congress time to reform the tax code. Nineteen Democrats joined with Republicans voting in favor of the bill.
Speaker John Boehner (R-Ohio) told reporters Thursday that Republicans have voted to stave off tax increases when current tax rates expire on Jan. 1, arguing that increases in the rates would hurt the already weak economy. Republicans believe that this vote will stand them in good stead on Election Day.
“The House is the only group in town here who’ve taken action to stop the looming tax hikes, which are going to cost over 700,000 American jobs,” Boehner said. “We’re the ones who’ve taken action. Where is the Senate? If we’re serious about helping the American economy, we can’t have these tax hikes going into effect in January.”
Senate Democrats feel they have political cover because they passed their plan two weeks ago. In speeches around the country, President Barack Obama has been working to build support for that plan to keep middle-class taxes low but allow tax hikes on wealthy taxpayers to take effect.
Under the Democratic proposal, the tax cuts would be extended for households making less than $250,000 a year.
“We passed middle-class tax cuts, which is going to pay dividends down the road strategically,” a senior Senate Democratic aide said.
Both parties are also positioning themselves on the $1.2 trillion in automatic spending cuts over 10 years that are set to hit beginning in January.
Boehner said the House has acted to avert the cuts that would hurt the nation’s ability to protect itself. Of the $1.2 trillion, half would come from security spending, which will force a raft of layoffs from defense contractors.
But Senate Democrats will not take up the measure and instead want to keep the threat of the cuts on the table in an effort to force Republicans to agree to a deficit reduction package that includes tax increases.
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