U.S. House Vote Continues Partisan Staredown Over Tax Breaks for Wealthy | Economics news | Scoop.it

by Richard Rubin, Bloomberg News

The U.S. House of Representatives voted to extend tax cuts through 2013 for all income levels, defying a veto threat from President Barack Obama and setting up a partisan showdown on fiscal policy after the Nov. 6 election.

The bill passed on a 256-171 vote yesterday, mostly along party lines. It won’t advance in the Democratic-led Senate, and a Senate-passed proposal failed in the House. To prevent a tax increase in 2013, one or both sides must give ground this year, and who concedes may depend on which party senses a political advantage after the election.

“It’s time to put the politics aside,” said House Speaker John Boehner, an Ohio Republican. “I know we’re in an election year, but my goodness, raising taxes at this point in this economy is a very big mistake.”

Obama and congressional Democrats want to let the tax cuts expire for top earners after they expire Dec. 31, and each side is accusing the other of holding the country and taxpayers hostage to get its way.

“We’re asking them to do something that we agree on,” said Representative Steny Hoyer of Maryland, the second-ranking Democrat in the House, referring to the tax cuts for all except the highest earners. “It’s unfortunate that we continue the pattern of rejecting compromise.”

White House spokesman Jay Carney said in an e-mailed statement last night that “we can’t afford another massive tax break for the wealthiest two percent of Americans. We’ve tried this approach, and it didn’t grow the economy or strengthen the middle class.” [MORE]