Democratic measures to extend tax cuts for a majority of citizens failed in the US Senate on Saturday as Republicans — and some Democrats — blocked them because they failed to extend low rates for the wealthy.
US President Barack Obama said he was disappointed with the vote, but indicated he was open to compromise on the tax cuts enacted under former Republican president George W. Bush, if certain conditions were met.
The Democratic plans — to renew low tax rates for individuals with income up to US$200,000 and for those making up to US$1 million — failed in procedural votes, as Republicans said low tax rates for the wealthiest should also be extended.
Obama and other Democratic leaders want to extend only the cuts for low and middle-income groups, contending the tax breaks for the wealthy would add too much to the yawning budget deficit.
Republicans, who dismissed Saturday’s vote as a political stunt because the measures had been expected to fail, argue that raising taxes for the rich is a mistake that would cost jobs.
“Those provisions should have passed,” Obama told reporters. “I continue to believe that it makes no sense to hold tax cuts for the middle class hostage to permanent tax cuts for the wealthiest 2 percent of Americans — especially when those high-income tax cuts would cost an additional US$700 billion that we don’t have and would add to our deficit.”
He said negotiators needed to “redouble” their efforts to ensure middle-class citizens did not face higher taxes on Jan. 1.
A White House official said Obama told Democratic congressional leaders on Saturday that he was open to compromise but would oppose even a temporary extension if it did not include an extension of benefits for the unemployed and of other tax cuts that benefit middle-class families.
Senate Majority Leader Harry Reid said he hoped to come to a consensus on the tax issue by the middle of next week but offered no details. Senate Republican leader Mitch McConnell said after the votes he was “relatively confident” that bipartisan talks would lead to an across-the-board renewal of the tax cuts and that the only unknown was the length of the extension.
The votes came two days after the House of Representatives passed an extension of the lower tax rates on individual income up to US$200,000. All the lower tax rates enacted under Bush in 2001 and 2003 will expire at the end of this year if the US Congress does not act.
Republicans will take control of the House next month and have more seats in the Senate following the party’s gains in the Nov. 2 congressional elections.
The electoral shift has emboldened Republicans and led some Democrats, including Obama, to signal a willingness to move toward the Republican position on the Bush-era tax rates.
Obama’s top economic advisers and lawmakers are in talks on a potential deal that could renew all the lower rates for one to three years, according to congressional aides.
Democrats want a one-year renewal of jobless benefits for hundreds of thousands of citizens, which began to expire this week when Congress did not agree on an extension.
Extending all the Bush-era tax rates would cost about US$3.6 trillion over a decade, according to administration estimates. Keeping them for those earning US$200,000 and under would cost US$2.9 trillion, while preserving the lower rates benefiting the highest income groups would cost US$700 billion.
MONEY MATTERS: Xi was to highlight projects such as a new high-speed railway between Belgrade and Budapest, as Serbia is entirely open to Chinese trade and investment Serbian President Aleksandar Vucic yesterday said that “Taiwan is China” as he made a speech welcoming Chinese President Xi Jinping (習近平) to Belgrade, state broadcaster Radio Television of Serbia (RTS) said. “We have a clear and simple position regarding Chinese territorial integrity,” he told a crowd outside the government offices while Xi applauded him. “Yes, Taiwan is China.” Xi landed in Belgrade on Tuesday night on the second leg of his European tour, and was greeted by Vucic and most government ministers. Xi had just completed a two-day trip to France, where he held talks with French President Emmanuel Macron as the
With the midday sun blazing, an experimental orange and white F-16 fighter jet launched with a familiar roar that is a hallmark of US airpower, but the aerial combat that followed was unlike any other: This F-16 was controlled by artificial intelligence (AI), not a human pilot, and riding in the front seat was US Secretary of the Air Force Frank Kendall. AI marks one of the biggest advances in military aviation since the introduction of stealth in the early 1990s, and the US Air Force has aggressively leaned in. Even though the technology is not fully developed, the service is planning
INTERNATIONAL PROBE: Australian and US authorities were helping coordinate the investigation of the case, which follows the 2015 murder of Australian surfers in Mexico Three bodies were found in Mexico’s Baja California state, the FBI said on Friday, days after two Australians and an American went missing during a surfing trip in an area hit by cartel violence. Authorities used a pulley system to hoist what appeared to be lifeless bodies covered in mud from a shaft on a cliff high above the Pacific. “We confirm there were three individuals found deceased in Santo Tomas, Baja California,” a statement from the FBI’s office in San Diego, California, said without providing the identities of the victims. Australian brothers Jake and Callum Robinson and their American friend Jack Carter
CUSTOMS DUTIES: France’s cognac industry was closely watching the talks, fearing that an anti-dumping investigation opened by China is retaliation for trade tensions French President Emmanuel Macron yesterday hosted Chinese President Xi Jinping (習近平) at one of his beloved childhood haunts in the Pyrenees, seeking to press a message to Beijing not to support Russia’s war against Ukraine and to accept fairer trade. The first day of Xi’s state visit to France, his first to Europe since 2019, saw respectful, but sometimes robust exchanges between the two men during a succession of talks on Monday. Macron, joined initially by EU Commission President Ursula von der Leyen, urged Xi not to allow the export of any technology that could be used by Russia in its invasion