Yesterday, House Democrats finally decided that they will bring a bill to the House floor extending the Bush tax cuts for only those making less than $250,000 per year. “That is the plan,” Speaker of the House Nancy Pelosi (D-CA) told a reporter yesterday.
The situation in the Senate is significantly muddier, however. While Senate Majority Leader Harry Reid (D-NV) has said he will hold a vote on just extending the middle-class tax cuts as well, the prospects for passage seem dim. This because Senate Republicans have made it quite clear that they intend to vote against a middle-class only extension, holding those cuts hostage until they get an extension of tax cuts for the rich as well. During an interview with Bloomberg News yesterday, Sen. Chuck Grassley (R-IA), the ranking member of the Senate Finance Committee, confirmed that this is exactly what the Republicans intend to do:
Q: The President, Democrats here, they are insisting that extend only for the middle-income Americans, those households earning less than $250,000 a year. If they put a bill on the floor that only advances that, doesn’t extend for high-end earners, is Chuck Grassley going to vote in favor of that.
GRASSLEY: No, and I don’t think any other Republican will, and there’s quite a few Democrats now that won’t. There was at least five or six Democrats back in September said that that was the wrong policy and there were forty-some Democrats in the House that signed a bill saying that that was not good policy.
So this is the game that Republicans are ready and willing to play: either they get an extension of the Bush tax cuts for the richest two percent of Americans, at a cost of $830 billion over the next decade, or they let the tax code reset to where it was in 2001 and everyone’s taxes go up.
And they’re being aided by Sen. Joe Lieberman (I-CT), who said yesterday that a full extension “would be OK,” and Sen. Ben Nelson (D-NE), who said “it wasn’t a matter of who gets the tax cuts, but a matter of for how long everyone gets them for.”
When asked about the ongoing work of President Obama’s fiscal commission, Grassley warned of the current trajectory of the nation’s budget deficit, saying, “we can’t continue on that path or this generation, new generations, aren’t going to have an increase in the standard of living. He added that getting the deficit down was “the most important thing” the commission could do. Of course, one great way to get the deficit down is not spending $830 billion over the next decade to finance tax cuts for the rich.