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GOP Blocks Senate Small-Business Tax Cut Bill

Bill Clark/CQ Roll Call

Senate Republicans made good on their threat to filibuster a Democratic small-business tax cut bill today, ensuring the bill fell seven votes short of what it needed to move forward.

The Senate voted 53-44 to limit debate on the bill and move to final passage, but 60 votes were needed to overcome the filibuster.

Before the bill was filibustered, the Senate killed, 57-41, a proposal by Sen. Mary Landrieu (D-La.) that would extend a raft of tax cuts to small business, including expanded expensing for certain capital investments. Sixty votes were needed to move it forward. The chamber also tabled, 73-24, a House small-business tax break bill. Democrats have criticized the House bill because they say wealthy individuals, such as Paris Hilton, could also take a tax break.

The Senate small-business bill would provide tax breaks for business that add to their payrolls, either through new hires or increased pay, and would allow businesses to accelerate the way in which they deduct business expenses.

Senate Majority Leader Harry Reid (D-Nev.) argued Republicans would typically support the small-business bill save for their desire to deny the president a political victory ahead of the November elections. “There is no reason for them to oppose this bill other than to hurt President Obama,” Reid said today.

But Republicans said they were inclined to filibuster if Reid did not allow more amendments to the bill.

“I’m obviously not going to vote for a piece of legislation that I haven’t been able to help craft,” Minority Whip Jon Kyl (R-Ariz.) said Wednesday.

Despite his loss today, Reid confidently predicted this afternoon that he has the votes to defeat a GOP measure to extend the 2001 and 2003 Bush-era tax cuts for one year.

“One of the things I am good at around here is counting votes,” Reid said.

Reid rebuffed questions about whether the vote on the Republican plan would be a tough vote for Senate Democrats in difficult races.

“My Senators are going to be doing just fine,” Reid said, noting that they are advocating for the middle class, a message that resonates with voters.

On Wednesday morning, Senate Minority Leader Mitch McConnell (R-Ky.) sought unanimous consent to hold votes on the Republican plan and the Democratic plan, as articulated by President Barack Obama earlier this week, to extend the tax breaks for only those households making less than $250,000 a year.

Reid objected, citing his desire to keep the debate on the small-business tax bill.

Republicans charged that Reid’s refusal to accept the request for votes on Bush tax cuts showed that Democrats are not serious about dealing with the fiscal cliff; the tax breaks expire for all at the end of the year, a scenario that some say could put a strain on the already-weak economy.

Reid later Wednesday proposed a vote on both tax proposals, but only after a vote on the Democrats’ small-business tax bill and a House-passed small-business tax bill.

McConnell objected to the request citing the fact that they first want to see the Democrats’ version of Obama’s plan in writing.

“Everyone knew yesterday what’s in our bill,” Reid continued, adding that it would focus on extending the income tax rates.

Democrats also said they want to keep the debate on taxes going because they believe they have a good message.

“We will be happy to spend the next couple of weeks telling the public about the president’s proposal to cut middle-class taxes and the Senate Republicans’ proposal,” said. Sen. Charles Schumer (D-N.Y.), which he said leaves out extensions of certain tax breaks for the middle class.

“The more people that hear the difference between the two, the more they side with ours,” said Schumer, who heads the Senate Democrats’ policy and communications arm.

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