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Senate Democrats Are Defiant After Tax Vote Losses

Senate Democrats remained defiant Saturday after Republicans easily defeated their middle-class tax-cut proposals and said they would simply allow all of the Bush-era tax cuts to expire if the GOP does not relent.

Senate Majority Leader Harry Reid (D-Nev.) forced the unusual Saturday votes after negotiations broke off with Republicans to conduct a string of votes on GOP and Democratic proposals for extending the tax cuts. As expected, Democrats couldn’t come close to generating 60 votes for plans that would have advanced the tax cuts only for families with incomes up to $250,000 and then up to $1 million.

Saturday’s politically minded votes on two middle-class tax-cut extensions were intended to be something of a cathartic moment for Democrats. Leaders hoped the votes, which never had a chance of succeeding, would allow their members to blow off partisan steam before accepting a short-term deal to extend all of the cuts.

But Democrats emerged from the votes at least appearing to be more energized than when they went in.

“We are going to continue this fight until we achieve our goal, a permanent extension of tax cuts for the middle class and no tax cuts” for the wealthy, Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.) said following the vote.

When asked whether his Conference would allow the cuts to lapse, rather than give in to GOP demands that the wealthy also have their tax cuts extended, Schumer declined to predict an outcome. But he made clear that strategy has support.

“There’s lots of people in our caucus who have that appetite,” Schumer said.

Sen. Claire McCaskill (D-Mo.), one of the most vocal critics of the GOP’s opposition to a middle-class-only strategy, called the fight “the ultimate game of chicken” and warned there is a possibility of all the tax cuts expiring and the fight dragging on into January.

“I think it’s a possibility if they’re really going to say, ‘We’re going to deny tax cuts to 99.9 percent of America, [so we can give tax breaks to] folks that have two homes and a yacht?’ I think they’re in a dangerous position, they’re in a very dangerous position. … So, we’ll see,” she said.

Sen. Tom Harkin (D-Iowa) went so far as to call for a veto of anything beyond a middle-class-only bill by President Barack Obama, who has all but formally agreed to the GOP’s demands for a short-term extension of the tax cuts.

“I think the president should draw a line in the sand, as he said many times in Iowa, when he campaigned, he was drawing the line at $250,000 and no more. And he should stick with that and use his veto pen if he has to,” Harkin said following the votes.

What the renewed resistance to a deal on extending all the tax cuts means for bipartisan negotiations remains unclear. The White House and Republicans are generally in agreement on the broad outlines of a deal, and it had been thought the talks would begin to center on what items, like unemployment insurance or the tax extenders package, the GOP was willing to give Democrats for their support.

But with talks on hold because of the Saturday votes, it is now unclear whether they will resume in the face of the stiff Democratic opposition declared after those votes.

While many Democrats, the White House and Republicans all believe the path forward on tax cuts runs through an agreement that extends all the cuts for two to three years, Democrats insisted they will eventually break through with the public and build enough support to break Republicans.

“We think pressure will continue to build on Republican Senators. … We expect two, three, four, five, 10 Republicans to peel off because they don’t want to be on the wrong side of history,” Sen. Sherrod Brown (D-Ohio) said.

But Senate Republicans appeared unmoved and shrugged off Democratic threats to extract a political price from the GOP.

“We didn’t need the showboats today to make any progress on trying to solve this very, very significant issue of whether or not we’re going to raise taxes in the middle of a recession,” Senate Minority Leader Mitch McConnell (Ky.) told reporters Saturday.

“In the meantime, discussions continue. I’m hopeful that we’ll be able to resolve this. I’m relatively confident that the end of this process will lead us to, I think, a very sensible position not to raise taxes on anybody,” he added.

The Minority Leader also appeared to confirm that negotiations are moving on dual tracks, with discussions involving Congressional GOP leaders and the highest levels of the White House, as well as a group of appointed House, Senate and administration negotiators.

“There are lots of talks going on,” McConnell said. “I think it’s a healthy sign.”

But on Friday, White House officials sought to tamp down reports of separate tax cut negotiations quietly going on between McConnell and the White House. Any discussions taking place outside of the bipartisan, bicameral group led by Treasury Secretary Timothy Geithner are just part of ongoing general talks, they said.

“There is one negotiating process that has six principle negotiators,” one official said.

David M. Drucker and Jennifer Bendery contributed to this report.

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