By Sam Goldfarb, CQ Staff

Despite some division in their ranks, Senate Democrats are forging ahead with a plan to vote on President Obama’s proposed one-year extension of the George W. Bush administration’s tax cuts on household income below $250,000.

A day after Obama unveiled his plan to deal with the year-end expiration of tax cuts enacted in 2001 and 2003 (PL 107-16, PL 108-27), Senate Majority Leader Harry Reid, D-Nev., pledged to hold a vote on the proposal “as soon as we can.”

A Democratic leadership aide said the middle-income tax cut extension would be one of the next two bills the Senate takes up after it finishes consideration this week of a tax cut measure for businesses that hire new workers. At that point, the Senate will also vote on a GOP alternative that would preserve current tax rates for all taxpayers for another 12 months, the aide said.

Although some Democrats have lobbied to continue the Bush tax cuts on incomes up to $1 million, instead of $250,000, that option will probably not come up for a vote, aides said.

Speaking to reporters after Senate Democrats met for almost two hours with Treasury Secretary Timothy F. Geithner and senior Obama adviser David Axelrod, Reid praised Obama’s proposal as “basically common sense.”

“All of our work should be focused on the middle class, the 98 percent we’re trying to protect, people who need these tax cuts to help put the food on the table, buy some gas for their car, pay their rent and their mortgage,” he said.

Senate Minority Leader Mitch McConnell, R-Ky., said Republicans welcomed a debate over taxes and would make the case that letting tax cuts expire on incomes above $250,000 would hurt small businesses that pay taxes as individuals.

Hiring Credit Sets Debate

Clearing the way for a weeklong discussion of tax policy, the Senate voted 80-14 on Tuesday to proceed to legislation (S 2237) that would give employers a credit worth up to $500,000 to offset 10 percent of the amount they spend to expand their payroll in 2012 compared to 2011. The bill also would allow businesses to deduct the full cost of equipment purchased this year.

Although several Republicans have dismissed the hiring tax credit as a gimmick, a majority of GOP senators supported the procedural motion in the hopes that they can amend the bill when it comes to the floor.

Among the amendments Republicans would like to offer is one by Senate Finance ranking member Orrin G. Hatch of Utah that would extend the Bush tax cuts for a year and instruct the Finance Committee to craft legislation that would reduce rates and simplify the tax code.

Asked whether he would allow a vote on Hatch’s amendment, Reid promised to “move through this amendment by amendment and see what we can work through.”

Given Reid’s plan to consider the Bush tax cuts later on in the month, however, it seemed unlikely he would permit a vote on Hatch’s amendment in the present context, making it unlikely Republicans would allow a final vote on the hiring tax credit.