In Senate, Republicans Block ‘Buffett Rule’

Senate Republicans today blocked a move to open debate on the so-called Buffett Rule, ensuring that a measure pressed for months by President Obama and Senate Democrats to ensure that the superrich pay a tax rate of at least 30 percent will not come to a decisive vote.

But the fierce debate preceding the 51-45 vote – the Democrats were nine votes short of the 60 they needed – set off a week of political wrangling over taxes that both parties insist they are already winning.

Senate Democrats intend to return repeatedly to the legislation, named after the billionaire investor Warren Buffett, who has complained that he pays a lower effective tax rate than his secretary. On Thursday, House Republicans will counter with a proposed tax cut for businesses that they say would spur job creation but would cost the Treasury almost exactly what the Democrats’ tax increase would raise.

Republicans say they like that contrast, and their language ahead of the procedural vote on a motion just to take up the Buffett rule was harsh and aimed squarely at Mr. Obama, who first proposed a 30-percent tax rate floor for anyone earning at least $1 million a year last September. Senator Mitch McConnell of Kentucky, the Republican minority leader, went to the Senate floor and all but called Mr. Obama a liar.

“By wasting so much time on this political gimmick that even Democrats admit won’t solve our larger problems, it’s shown the president is more interested in misleading people than he is in leading,” Mr. McConnell said of the Buffett Rule push.

Democrats said they saw that as a sign of weakness. Pointing to a Gallup poll from last week that indicated 60 percent of Americans supported the proposal, including 63 percent of political independents, Senator Charles E. Schumer, Democrat of New York, called the Republican response “proof positive” that “for first time in decades, maybe generations, they’re on the defensive on their signature issue,” taxes.

After he made that comment, a CNN poll was released putting support at 72 percent, including 53 percent of Republicans.

With taxes due on Tuesday, a Washington debate on the tax code this week was inevitable, but the escalating attacks reflect the peculiarities of this election year. Democrats have known for weeks that the Buffett Rule would not win the 60 votes needed to break a Republican filibuster, but they pressed forward in part to try to make the Republicans’ likely presidential nominee, Mitt Romney, the face of economic “unfairness.”

Mr. Romney paid an effective tax rate of 13.9 percent on $21.7 million in income in 2010, the only full year’s tax returns he has released. The Obama re-election campaign and the Democratic National Committee again pressed Mr. Romney on Monday to release more than a decade’s worth of tax returns, something his campaign has refused to do.

“I don’t think he’s going to want this present inequity to remain when he is a prime example of it,” Mr. Schumer said.

In the Senate, all the Republicans but Senator Susan Collins of Maine voted against allowing debate on the Buffett Rule. Every Democrat but Senator Mark Pryor of Arkansas voted to allow it. Four senators did not vote.

Republicans relished a debate on their turf, accusing Democrats of trying to raise taxes on investments and capital to feed their appetite for government spending. They portrayed the Buffett Rule as a gimmick and political show vote, whose revenue impact would not even dent the trillion dollar budget deficit.

Instead, the House will vote on a bill by Representative Eric Cantor of Virginia, the majority leader, to give businesses with fewer than 500 employees a 20 percent tax cut this year. Mr. Cantor says that while the Buffett Rule would raise taxes on “job creators,” his bill would spur job growth by easing the tax burden on small businesses.

Republicans and Democrats have created mirror-image arguments to take into the election year. The Cantor bill would cost the Treasury $46 billion. The Senate Democratic bill would raise $47 billion over 10 years – but $160 billion if the Bush era tax cuts for the affluent are extended.

Democrats argued for more fairness in the tax code. Their legislation would establish a 30-percent floor for households earning $1 million a year, with that threshold rising with inflation. Those taxpayers would still be able to deduct charitable donations.

A White House statement on Monday supporting the Senate bill said “one in four taxpayers with annual income greater than $1 million today pays a lower tax rate than millions of hardworking middle-class households.”

Republicans argued that no one’s taxes should be raised while the economy is struggling to regain its footing. The House bill would offer a tax cut to small businesses, but it is drawn so broadly that it would benefit anyone with income through partnerships and other “pass-through” entities.” Almost half the benefit would accrue to the households with income over $1 million, according to the non-partisan Tax Policy Center.

The Democratic Senatorial Campaign Committee immediately went after the two most vulnerable Senate Republicans standing for re-election this year, Scott P. Brown of Massachusetts and Dean Heller of Nevada, accusing them of standing by billionaires while their party tries to cut Medicare. And they vowed the measure would continue to come up this year, as a way to pay for a succession of other proposals, from transportation to tax cuts.

“Sometimes special interests can take a punch or two, and it’s only the threat of public persistence that can move an issue along,” said Senator Sheldon Whitehouse, Democrat of Rhode Island and the author of the legislation.

But Republicans were just as much on offense. The National Republican Congressional Committee said vulnerable House Democrats could “either focus on growing small businesses by providing them tax relief to create jobs or help his party leaders raise taxes to fuel their spending addictions.”

{The New York Times/Matzav.com Newscenter}