CQ TODAY ONLINE NEWS
Oct. 12, 2011 – 10:41 p.m.
Trying to Keep the ‘Millionaires Tax’ Alive
By Sam Goldfarb, CQ Staff
Senate Democratic leaders are looking to force additional votes on their “millionaires surtax,” as party strategists try to salvage political advantage from President Obama’s rejected jobs proposal.
Under a plan being discussed by Senate leaders and the White House, the Senate would vote on individual pieces of the jobs bill with scaled-back versions of the surtax. Raising levies on the wealthiest 1 percent of Americans is a tax issue that polls well with the public, and Senate Democrats appear unwilling to abandon the proposal while they joust with Republicans in advance of the 2012 election.
Majority Leader
Reid indicated that he would try to hold the first vote on a smaller jobs bill next week but did not offer additional specifics. “We’re working very closely with the White House and my caucus, and until we have a direction from my caucus, we’re not really able to make a decision,” he said.
A Senate leadership aide confirmed later that Democrats were discussing how to reuse the tax proposal they have latched on to as one way to raise revenue with minimal political damage and some potential for gain.
But the aide said no decisions were final and noted that it might be awkward to restructure a tax increase that was originally supposed to generate $453 billion so that it would raise a fraction of that amount.
The 5.6 percent surtax on households with income over $1 million was conceived by Democrats to pay for the entire package of tax cuts and spending programs that Obama offered as a way to revive the flagging economy. Many Democrats disliked Obama’s preferred offsets, which included limiting the value of tax deductions for taxpayers earning more than $250,000 and eliminating tax breaks for large oil companies and corporate-jet owners.
Despite weeks of campaigning from Obama, the Senate refused by 50-49 on Oct. 11 to allow his jobs package to advance; 60 votes were needed to end a Republican filibuster of the bill. Before the vote, almost every Senate Republican and a few Democrats said they opposed the surtax and tax increases in general.
New Strategy, Similar Results
Under the possible Democratic strategy, the surtax would be repeatedly revisited each time a jobs bill is brought to the floor, with the tax scaled to the cost of the jobs measure under consideration. That would be a somewhat unusual approach to tax policy, and some Democrats are not on board with what Senate leaders and the White House are discussing.
“I understand that people want to divide this, but it’s going to be very tough to do,” said Sen.
Still, Obama’s jobs bill features many elements that Democrats might want to consider individually. Those include an extension and expansion of the current Social Security payroll tax cut for employees, tax cuts for companies and $175 billion in spending to rebuild infrastructure, help the unemployed and prevent teacher layoffs.
Paying for any of those initiatives with a tax on upper-income earners would be opposed by Republicans. As a result, Democrats are giving at least some consideration to introducing bills without offsets, although there appears to be little appetite in Congress to consider legislation that would add to the deficit.
Trying to Keep the ‘Millionaires Tax’ Alive
“There’s pros and cons to everything,” said Sen.
Explaining the motivation of Senate leaders, Schumer expressed hope that Republicans would “go along with some sort of jobs program” if they are put under constant pressure from Democrats.
For his part, Senate Minority Leader
“There are government actions that we can take,” McConnell told reporters Wednesday. “We may take some of these on a bipartisan basis before the end of the year. Some of them are probably going to be considered by the joint select committee. But the government is not the solution to this sluggish economy. The government is the problem.”
Niels Lesniewski contributed to this story.