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Senate passes middle class tax-cut extension

In a purely political exercise this afternoon in the Senate, Senate Democrats narrowly passed a bill 51 to 48 to extend Bush-era tax cuts for middle class Americans for another year. With Vice President Biden presiding over the Senate, Democrats lost only two votes: Sen. Jim Webb (D-Va.) and Sen. Joe Lieberman (I-Conn.), who regularly votes with Democrats.

Under the plan, income tax rates for individuals making up to $200,000 and families making up to $250,000 would remain the same in 2013. Rates on upper income Americans would expire on Dec. 31st.

"This is a big victory for the American people today," Vice President Biden said in a show of support for Senate Democrats. Biden's presence in the Senate chamber was a symbolic move, his vote was not needed to put Democrats over the top.

The bill follows through on an election-year call from President Obama to protect the middle class from an income tax hike next year. He has campaigned on the message that wealthier Americans should pay more in taxes to help reduce the national deficit.

"Democrats believe this country can't afford more budget-busting giveaways for the top 2 percent of earners," Majority Leader Harry Reid told his fellow senators on the floor.

But Republicans argue the Democrats’ bill would mean almost a million small business owners in those upper tax brackets would see a tax increase. Minority Leader Mitch McConnell said Democrats are not serious about the nation's fiscal problems. 

"We know this is not about the economy. We know this is about the election," he shot back at Reid on the floor.

"Thank goodness it’s not going anywhere because it would be bad for the economy. The single worst thing we could do to the country," he said of the Democrats’ bill.

House Republicans have no plans to take up the Senate-passed bill; they will move ahead next week on their own legislation that would extend the Bush-era tax rates for all Americans for one year. A similar version failed today in the Senate.

The legislative maneuvering has set the stage for two competing messages heading into November.

As the Senate Democrat's political messaging leader Chuck Schumer (D-NY) told reporters,

"The House can either pass these middle-class tax cuts, like we did, or it will be clear they're putting millionaires first."

Or the Republican view as articulated by Mitch McConnell: "Here's the Democratic plan for the economy: ‘We'll get this thing going again. We'll get it going again by raising taxes ... give us your money, and we'll handle it for you.’ That's their tax plan. That's their plan for the economy and jobs."