Washington Digest: Senate extends tax breaks


WASHINGTON - The Democrat-led Senate last week approved legislation over the objection of most Republicans to extend expiring tax cuts to families earning less than $250,000 a year.

Republicans argued the tax breaks, enacted in 2001 and 2003 and set to expire at the end of the year, should be extended to everyone. They said the Democrats were leaving the proprietors of nearly 1 million small businesses in the lurch.

But Democrats said the tax cut legislation would benefit 98 percent of households, while saying wealthier Americans should contribute more to battle the deficit.

With President Barack Obama behind the Democratic effort, Senate Majority Leader Harry Reid of Nevada hailed the vote, saying the tax cut "is the only solution that stands a chance of being signed into law."

The Senate-approved bill has no chance of passage in the Republican-led House. GOP leaders there say they will vote to extend the tax breaks to households of all income levels.

"You cannot help the job seekers by punishing the job creators with a massive new tax burden," said House Republican Conference Chairman Jeb Hensarling of Texas.

The Senate voted, 51-48, in favor of the bill. The roll call fell largely along party lines with Sens. Jim Webb, D-Va., and Joe Lieberman, I-Conn., voting against it. No Republican supported it. Reid voted for it. Sen. Dean Heller, R-Nev., voted against it.

A Republican effort to extend the tax cuts to families earning $250,000 or more failed, 45-54.

Republicans argued that extending the tax breaks to the wealthy and small business owners would avert more job losses. Democrats said the GOP proposal failed to extend a variety of smaller tax benefits for the middle class, such as tax credits for college tuition and credits for low-income earners.

Sen. Mark Pryor of Arkansas was the only Democrat to support the GOP alternative. He also voted for the Reid bill. Two Republicans opposed both proposals, Sens. Susan Collins of Maine and Scott Brown of Massachusetts.

Heller voted for the GOP alternative. Reid voted against it.

HOUSE OKS FREEZE ON NEW REGULATIONS

The House approved legislation last week that would restrict new government regulations until the unemployment rate drops to 6 percent or below.

"We need reasonable regulations and common sense regulations. The problem is with excessive and overly burdensome regulations," said Rep. Tim Griffin, R-Ark., who sponsored the bill.

The bill was backed by business groups including the U.S. Chamber of Commerce and the National Federation of Independent Business. Environment, labor and consumer groups opposed it.

The Senate is not expected to consider the bill, and the Obama administration has threatened a veto saying it would undermine critical public health and safety protections as well as add layers of procedural burdens to rule making that Congress has mandated.

The bill passed, 245-172, with 13 Democrats in favor. Reps. Joe Heck and Mark Amodei, both R-Nev., voted for it. Rep. Shelley Berkley, D-Nev., voted against it.

HOUSE FAVORS INCREASED SCRUTINY OF FED

The House voted 327-98 for a bill that would have congressional investigators performing comprehensive audits of the Federal Reserve's Board of Governors and 12 regional banks.

The legislation, which was sponsored by Rep. Ron Paul, R-Texas, would expand congressional oversight of the central bank beyond those included in the Dodd-Frank Act passed after the 2008 Wall Street meltdown.

Paul argued that the bill would make the Fed's monetary policy decision making more transparent. But, Rep. Steny Hoyer, D-Md., argued that it could cause politics to factor into Fed decisions.

Amodei, Berkley and Heck voted for the bill.

Contact Stephens Washington Bureau reporter Peter Urban at purban@stephensmedia.com or at 202-783-1760.

 

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