Republicans in the House of Representatives approved the extension
of all Bush-era tax cuts, including deeply polarizing cuts for the wealthiest
Americans, in a mostly symbolic presidential election year move Wednesday
Republicans said the cuts could help shore up a
still-frail U.S. economy, while the Obama administration warned that threatened
budget cuts could send some of America's troops into battle with less training.
For all the action and talk, however, both taxes
and spending were deeply enmeshed in campaign politics, with no resolution
expected until after the November elections. The House measure has no chance of
passing the Democrat-controlled Senate or surviving an Obama veto.
The vote was more about political messaging three
months before the election than a genuine attempt to resolve longstanding
differences that threaten to hit Americans with a tax increase if the deadlock
isn't broken in a post-election session.
Democrats are demanding that any compromise to
avoid the $110 billion in budget cuts that are scheduled to kick in Jan. 2
include a tax increase on high-income earners, returning tax rates on the
richest Americans to pre-President George W. Bush levels.
Republicans reject the idea of raising rates on
anyone as the economy struggles to recover fully from recession. Democrats said
Republicans were holding the middle class hostage by insisting on renewing tax
cuts that go to the top 2 percent of earners. Polls show most Americans support
the Democrats' position.
Deputy Defense Secretary Ashton Carter told the
committee that if Congress fails to come up with a compromise, nearly all
elements of the military will be affected by cuts mandated by a deal struck
last year to reduce the deficit. Training would be scaled back and flying hours
for Air Force pilots would be reduced. The Navy would buy fewer ships and the
Air Force fewer aircraft.
"Some later-deploying units (including some
deploying to Afghanistan) could receive less training, especially in the Army
and Marine Corps," Carter said. "Under some circumstances, this
reduced training could impact their ability to respond to a new contingency,
should one occur." Military personnel would be exempt from job cuts, but
furloughs might be issued and commissary hours reduced, he said.
Later, Republicans moved to renew the Bush tax
cuts for every working American. The cuts will otherwise expire Dec. 31, part
of a combination of effects along with major spending cuts that have been
characterized as a "fiscal cliff" for the economy. The bill passed by
a 256-171 vote. Nineteen Democrats joined with Republicans.
There is no expectation that the Democratic-led
Senate will even consider the House measure, at least before the elections.
Democrats in the House countered with a plan
backed by President Obama to extend the tax cuts for all but the
highest-earning Americans. Their plan would raise the marginal top tax rate on
incomes over $200,000 for individuals and $250,000 for couples from 35% to
39.6%. It failed, 257-170, with 19 Democrats breaking with Obama.
Two years ago, the Bush tax cuts were renewed in
their entirety with the support of Obama and many Democrats as part of a
bargain in which Obama also won a Social Security payroll tax cut and an
extension of unemployment benefits.
Now, the White House promises Obama will veto the
extension if it includes the highest earners. Obama instead supports a plan
that passed the Democratic-controlled Senate last week.
Republicans said that measure would hit 1 million
small businesses — and more than half of small business income — with a tax
increase.
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