Senate Democrats delay extension of tax cuts

Senate Democrats decided Thursday to postpone any action on extending Bush administration-era tax cuts until after the November election, a move that will keep the tax cut debate swirling through the midterm campaign.

Democrats and President Obama want to keep the tax cuts in place only for taxpayers making less than $250,000. Republicans want tax cuts extended for wealthier taxpayers as well.

The delay, at a time of growing voter concern over the sluggish economy, poses both political risks and potential rewards to Democratic leaders.

With just days remaining before Congress adjourns to campaign full-time — and with Republicans pressing to extend the tax cuts for even high-income earners — Senate Democrats decided to punt the issue to a lame-duck session of Congress that would be held after the Nov. 2 election but before the tax cuts expire December 31.

“The reality is nothing’s going to happen before the election,” said Sen. Richard J. Durbin (D-Ill.), the Democratic whip.

“Democrats believe we must permanently extend tax cuts for the middle-class before they expire at the end of the year, and we will,” said Jim Manley, a spokesman for Senate Majority Leader Harry Reid (D-Nev.). “Unfortunately, to this point we have received no cooperation from Republicans to do so.”

Democrats in the House still may act on the issue before the election, but are wary of a vote that could be represented as a tax hike.

Republicans repeatedly have defended tax cuts for those making $250,000 and above as an incentive for business owners.

After a closed-door caucus meeting on the issue Thursday afternoon, Sen. Even Bayh (D-Ind.), who is retiring, said senators who are not up for reelection tended to favor a vote on the issue, while those in the midst of campaigns prefer not to have a vote.

Party strategists offered mixed views on which side might benefit from the impasse.

“It helps Republicans make the case that [Democrats] are not committed to taking the steps to helping our economy,” said Rep. Cathy McMorris Rodgers (R-Wash.).

But Rep. Alan Grayson (D-Fla.), who is in a tough reelection battle for a second term, was happy to let the debate linger over the campaign.

“The point has been made: The Republicans, almost to a member, are in favor of tax cuts for the rich,” he said.

Unconcerned that he would be tarred as favoring a tax hike on higher-wage earners, he shrugged: “In my district, we have about three.”

lmascaro@tribune.com