The US House of Representatives, in the waning days of Democratic control, passed an extension on Thursday of Bush-era tax cuts for the lower and middle classes in a symbolic vote that would let tax cuts for the wealthiest expire.
The measure, which passed 234-188, is expected to die in the US Senate, where Republicans have the votes to block it. Twenty Democrats voted against the House bill and three Republicans voted for it.
Despite the likely outcome, Senate Majority Leader Harry Reid may have held a vote on the House bill yesterday, Democratic aides said.
Senators may also vote on a Republican alternative that would permanently extend all the tax cuts. A compromise measure offered by Democratic Senator Charles Schumer, which would let the top tax rates expire only on income above US$1 million, could also be voted on, according to aides.
All of these measures are expected to fail as congressional leaders and US President Barack Obama’s administration continue talks behind closed doors on a potential compromise.
“The talks are ongoing and productive, but any reports that we are near a deal in the tax cut negotiations are inaccurate and premature,” White House press secretary Robert Gibbs said.
Most Democrats say Republicans were willing to jeopardize low tax rates for middle and lower-income taxpayers to ensure low taxes for the wealthiest in the US.
The tax cuts were signed into law by former US president George W. Bush in 2001 and 2003, and are set to expire Dec. 31.
“The Republicans want to continue to keep middle-income tax cuts hostage until it is combined with upper-income tax cuts,” said Democratic Representative Sander Levin.
Republicans say allowing any tax rates to rise would threaten the economy, which is suffering from high unemployment rates.
On Capitol Hill, senior -Democratic aides said they did not expect any significant progress until at least next week.
Another aide said many Democrats were worried the White House would not stand up to Republicans.
Many people, including some Democratic aides, who asked not to be identified, believe a one-to-three year extension of all the Bush-era rates is the most likely scenario.
In exchange, Obama administration officials hope to win Republican consent to an extension of long-term unemployment insurance and to Senate ratification of the new START nuclear treaty with Russia.