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Senate passes cuts for all but richest Americans

By Laurie Kellman

Associated Press

Published: Thursday, July 26 2012 1:16 p.m. MDT

Senate Majority Leader Harry Reid, D-Nev., speaks to reporters just after Senate Democrats passed their version of a yearlong tax cut extension bill by a near party-line 51-48 vote, at the Capitol in Washington, Wednesday, July 25, 2012. At right is Sen. Charles Schumer, D-N.Y.

J. Scott Applewhite, Associated Press

WASHINGTON — The Senate has debated, sniped and voted on the politically fraught issue of tax cuts, and next week the House is likely to do it all over again. Still, Americans won't know until after the November elections how much more of their paychecks will go to the government next year.

House Speaker John Boehner said Thursday that his Republican-led chamber is "more than willing" to make Democrats vote on the President Barack Obama's plan to extend former president George W. Bush's tax cuts for all but the wealthiest Americans. He also is bringing up the GOP's proposal to extend the tax cuts for everyone.

The outcome is almost certainly stalemated until the November elections, so leaders of both houses of Congress are turning the House and Senate into campaign stages on one of the defining issues of the presidential and congressional races.

Obama signaled on Thursday he's ready to do his part to light a fire under lawmakers. "I would urge the House of Representatives to do the right thing," he told reporters during a Cabinet meeting. He said he and top aides will "amplify that message" in the days to come.

Obama said the one-year extension would provide "certainty and security to families who are already feeling pinched" and reassure businesses by taking "a whole bunch of uncertainty out of the economy" at a time of global economic worries.

The Senate opened the drama Wednesday with surprise debates and passage of a Democratic bill fashioned on President Barack Obama's proposal to extend the income tax cuts to all but the wealthiest Americans through 2013. It passed even though the measure stands no chance of surviving the Republican-led House. Meanwhile, the Senate rejected a GOP amendment to extend the cuts to all taxpayers. House Speaker John Boehner, R-Ohio, intends to bring up that measure in his chamber next week.

So the matter was a nearly certain stalemate even before Democratic leader Harry Reid and Republican leader Mitch McConnell abruptly agreed to vote on two measures, spent the day accusing each other of playing politics and the last 20 minutes trying to get the last word.

"We know this is about the election," McConnell said. At one point he resolved to let Reid close the debate but then changed his mind to dispute a point.

"Here we go again," Reid muttered. Some of McConnell's remarks, he added, were "poppycock."

Despite the drama, the issue carries great significance for voters deeply worried about their finances as the economy struggles to recover from recession. Which way the debate goes could mean a big difference: an average of $1,600 a year in taxes for 114 million middle-class families, according to the White House.

The electorate is deeply divided over the tax cut issue.

A CBS News/New York Times poll conducted July 11-16 found that nearly half of Americans, about 49 percent, would prefer that the 2001 and 2003 tax cuts continue only for those households earning less than $250,000 a year, as Obama and congressional Democrats want. An additional 17 percent think the cuts should expire for everyone. And 27 percent say the tax cuts should be continued for all taxpayers, as Republicans want.

Wednesday's Senate vote on the $250 billion Democratic bill was a near-party line 51-40 tally, with Vice President Joe Biden presiding over the chamber in the unlikely event his vote was needed to break a tie. Minutes earlier, senators voted 54-45 to reject the rival Republican package that would have included the wealthiest Americans in the tax reductions.

"With the Senate's vote, the House Republicans are now the only people left in Washington holding hostage the middle-class tax cuts for 98 percent of Americans and nearly every small business owner," Obama said in a written statement.

The vote served as a counterpoint to the GOP-run House, which next week will pass tax cuts nearly identical to the $405 billion Republican plan the Senate rejected Wednesday.

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