Senate to Vote on Democratic Tax Cut Plans

Democrats are engineering a showdown in the Senate over tax cuts Saturday in an attempt to depict Republicans as guardians of the rich and gain an edge for the 2012 elections.

Republicans dismissed the attacks as the last gasp of a Democratic Party that lost its majority in the House of Representatives in the November elections, surrendered several seats in the Senate and will be forced to share power beginning in January.

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Republicans argue that allowing taxes to go up for the wealthy would hinder job creation at a time when the economic recovery is sputtering. Democrats say that extending the tax breaks for upper-income Americans would do little to stimulate the economy and only make it more difficult to reduce the country's growing federal budget deficit.

The debate is taking place a day after the Labor Department reported that the unemployment rate nudged closer to double digits again — 9.8 percent, after three straight months at 9.6 percent — a reminder that the economy is still recovering only fitfully.

The Senate agenda featured a pair of votes Saturday, one on a proposal to extend all expiring tax cuts on individuals with incomes of less than $200,000 a year and married couples making less than $250,000; the other to renew them for all tax filers with incomes of less than $1 million.

Republicans want to head off tax increases at all income levels, and neither Democratic proposal was likely to get the 60 votes needed to advance.

Democrats said that wasn't the point. "This is going to be a winning argument, not just for this week, but for the next two years," said Sen. Chuck Schumer of New York, looking ahead to the 2012 elections.

Political maneuvering aside, the events were seen as a prelude to completing negotiations on a compromise that could avert a Jan. 1 tax increase at all levels.

President Barack Obama has already signaled he is prepared to sign a compromise along those lines, and the White House has been negotiating privately with Republicans on a broader bill that would include Democratic priorities as well.

Among them are an extension of jobless benefits for the long-term unemployed and extension of additional expiring tax breaks for lower- and middle-income workers even if they don't make enough to owe the government money. College students would also benefit under the White House's proposals, as would companies that hire the unemployed.

Also part of the discussions is a possible increase in the federal debt limit, which allows the government to continue to borrow to meet its financial obligations.

In the weekly White House radio and Internet address, Vice President Joe Biden, skipped lightly over Obama's willingness to negotiate with the Republicans on the Bush-era tax breaks.

"We've got to extend the tax cuts for the middle class that are set to expire at the end of the month," he said. "If we don't, millions of middle-class families will see a big bite out of their paychecks starting January 1. And that's the last thing we should let happen."

"And the second thing we've got to do is extend unemployment insurance for Americans who have lost their jobs in a tough economy," Biden said.

Delivering the Republican address, Sen. Mark Kirk of Illinois, who was sworn into office this week, said voters in the midterm elections demonstrated their distaste for any tax increases.

"The current leaders of Congress should not move forward with plans that were just rejected by the American people," he said. "These leaders should not raise taxes and risk another recession. Instead, Congress should reduce spending and prevent another tax hike on American taxpayers."