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Senate Can’t Pass Tax Cuts, Back to Negotiations

The Senate as expected rejected Democrats’ efforts to pass two middle-class tax cut extension bills Saturday, clearing the way for the resumption of bipartisan talks to extend cuts for all tax brackets for two years.

By a vote of 53 to 36, the Senate defeated a proposal to extend tax cuts first on those earning up to $250,000 in income. Then, by a vote of 53 to 37, the Senate defeated a proposal by Sen. Charles Schumer (D-N.Y.) that set the income cap at $1 million. That plan was also opposed by the Obama administration.

Sixty votes were required to end debate on the issue.

Before the vote, Senate Majority Leader Harry Reid (Nev.) excoriated Republicans for their demands that the wealthy also be given tax cuts, calling their concern for the deficit “a sham” and likening their tactics to the famous Peanuts cartoon conceit of Lucy pulling the football away from Charlie Brown.

“We’ve all heard Republicans weep for the deficit they say they fear … But what did Republicans do? They pulled away the football and said: Rather than reduce the deficit, we’d really rather give an unnecessary, unwanted and unaffordable handout to the richest of the rich,” Reid said.

But despite Reid’s anger, neither measure ever had a chance of passing the Senate.

Both proposals faced opposition from all 42 Senate Republicans, a number of Senate Democrats and at best indifference from the White House, making the votes little more than fodder for election campaigns in 2012.

However, with the votes out of the way now, Democratic and Republican aides said they hoped bipartisan talks with the White House on a compromise bill will resume.

The question of how to handle the tax cuts has plunged the Senate Democratic caucus into something of a funk, with lawmakers meeting behind closed doors for hours in what aides have widely described as little more than group therapy sessions.

During these meetings, progressive members rail against the notion of extending the upper income tax cuts, insisting that eventually the public will rally to their cause.

Moderates and many of the party’s leaders, however, believe the historic gap in trust between Republicans and Democrats on taxes — and the fact that the White House has all but agreed to a short term extension — make the effort a quixotic fight.

Democratic leaders hope the votes held Saturday will placate liberals who have demanded they reject a compromise, and open the door to wider consideration for a short-term extension of all the tax cuts.

Senate Republicans, meanwhile, have largely stayed out of the fight, content to be spectators to the Democratic turmoil. “We’re just kind of sitting here watching, with mouths agape,” a senior GOP leadership aide said Friday.

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