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Senate Dems Plan Dramatic Tax Cut Vote, Followed By 'Grab Bag' Negotiations

Durbin

First Posted: 11/29/10 05:24 PM ET Updated: 05/25/11 07:15 PM ET

WASHINGTON -- With just weeks remaining before tax rates revert back to pre-Bush levels, Senate Democrats have come to the fragile conclusion that they should and will hold a solitary vote to extend rates for the middle class while letting those for the wealthy expire.

The line-in-the-sand stance was first hinted at weeks ago by Senate Majority Leader Harry Reid (D-Nev.), and it was brought up during a meeting between congressional leaders and the White House in the days before Thanksgiving break. But in discussions with The Huffington Post on Monday, various top-ranking aides in the Senate say that such a path forward has increasingly emerged as a fait accompli.

Not that the party expects they can win such a vote. The idea is primarily to draw a contrast with Republicans who stand opposed to the measure, as well as to please the progressive members of the caucus who have long argued that -- morally and fiscally -- letting the rates for the wealthy expire is smart policy.

"A lot of people want to have that contrast vote, to make it clear what we stand for," said one Senior Democratic aide. "So we take that middle-class vote first, then we look to a compromise and see what's in the grab bag."

What's in the grab bag could end up being the key towards passage. Democrats may be willing to give in to Republican demands that the rates for the wealthy be extended (at least temporarily) but not without getting some legislative goodies in return. On Sunday, Senate Majority Whip Dick Durbin (D-Ill.) iterated a deal that has long been discussed in private -- in exchange for giving in on the upper rates, Republicans would drop opposition to prolonging emergency unemployment benefits and other tax credits.

"I want to put a couple other things on the table," Durbin said on NBC's "Meet the Press." "We do have unemployment running out... I also want to make sure the earned-income tax credit, the childcare tax credit, and the 'Making Work Pay' tax credit are part" of the discussion.

And yet, it's not a given among staffers on the Hill that deals can be cut. One top Senate aide said that when it comes to adding gifts to the bag -- like, say, the opportunity tax credit ($4,000 credit in exchange for 100 hours of community service) -- the prevailing belief is that GOP lawmakers would be willing to scuttle the whole tax cut package.

"I don't see the Republicans going for anything this administration has proposed," the aide said. "Not if it looks like a duck and quacks like a duck."

Such discussion is, of course, speculative. There is no bag of bargained goodies let alone talks to begin putting together such a package for the purposes of getting a tax cut deal done. The more advanced negotiations, indeed, have centered on the idea of raising the threshold of who would see a tax increase should rates expire. Sen. Chuck Schumer (D-N.Y.) in particular has argued that the party should change the baseline for income that would be taxed from $250,000 to $1 million dollars. He was joined, in a little-noticed comment over Thanksgiving, by Sen. Joe Manchin (D-WV), a notable centrist vote who previously said he wouldn't back any tax increase.

But Senate Minority Leader Mitch McConnell (R-Ky) has flatly rejected the idea, saying that it was a "horrible idea" to raise taxes in the middle of a recession. Portions of the Democratic caucus, likewise, are skittish on the proposal, with several top aides noting that it would, essentially, involve the Democratic Party redefining the middle class as those making up to $1 million a year.

"That's a non-starter for many in our caucus," said one senior Democrat aide.

"That idea has been out there for a while," said another, who, like the rest spoke candidly about strategy on condition of anonymity. "And, as far as I can tell, the same group of people are still arguing for it but few others."

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