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Chambers Split on Who Should Move First on Tax Cuts

Even as they eye the exits, both House and Senate Democrats are struggling to create momentum in their own ranks for a pre-election debate on extending Bush-era tax cuts, and they are bickering over who should move first on the contentious issue.

Though there was a general agreement earlier this summer that the Senate would take the lead, Senate aides said that is now an open question. But House aides said they still expect the Senate to go first.

Senior Democratic aides in both chambers said their leaders are comfortable moving forward with President Barack Obama’s plan of extending tax cuts only for those making less than $250,000. But both said they are waiting to see what the other chamber can accomplish first.

“We’re with the president,” one senior House Democratic aide said. The aide added that even though 31 Democrats signed a letter to Speaker Nancy Pelosi (D-Calif.) asking for a one-year extension of Bush tax cuts for the wealthy, it does not necessarily mean they would not vote for a middle-class only bill. At any rate, the 31 defectors are short of the 40 votes needed to prevent passage of Obama’s plan.

But one senior Senate Democratic aide said Senate leaders are waiting for Pelosi to signal what is possible in her chamber, given that she may not have the votes to pass a clean extension of middle-class tax breaks.

“We can’t be totally at odds” in which legislation comes to the floor, the senior aide said.

Part of the problem is that neither House nor Senate Democratic leaders have solidified support in their respective caucuses for a specific approach.

“We still need to get everybody on the same page within our own caucus,” another Senate Democratic aide said.

One House aide said there is a “total stalemate” in the House, with Members divided over whether to vote before the elections and on what to do.

“I feel pretty confident that if the Senate were to actually send us something we could pass it, whatever it is,” the aide said. “I think the Senate using us as an excuse is a joke. They struggle to get 60 votes to tie their shoes, let alone one of the biggest wedge issues of the election cycle.”

Senate aides acknowledged that they do not think they have the filibuster-breaking 60 votes to pass Obama’s plan. At least five Members of the Senate Democratic Caucus have come out in favor of extending tax cuts for the wealthy, arguing no one’s taxes should go up during a recession. Senate Republican leaders have insisted all 41 in their ranks are united against the Obama plan.

But aides said there is some hope that Democrats can put enough pressure on centrist Republicans and Democrats to put them over the 60-vote mark. The thinking is that neither moderate Democrats nor moderate Republicans will want to be seen as holding up middle-class tax cuts before an election.

Whether the Senate moves forward or not, the divisions within House Democratic ranks could make it impossible to vote before the Congressional session ends in early October, delaying a vote until after the November elections. Some Democratic aides said a one-year extension of the Bush tax cuts for the wealthy alongside a permanent break for the middle class would help moderate Democrats politically, while setting Democrats up for an easier fight next year that would be exclusively over whether to give tax breaks to the wealthy or not.