Harry Reid wins latest procedural bout in face-off over taxes

By Karoun Demirjian

Thursday, July 12, 2012 | 2 a.m.

Bluff-calling makes for excellent sport in the Senate sometimes, and Wednesday, congressional leaders were at it like poker champions.

The Senate was back to its familiar unproductive state as Majority Leader Harry Reid and Republican Leader Mitch McConnell traded barbs and bluster over President Barack Obama’s proposal to extend tax cuts for incomes under $250,000, and tax incentives for small businesses.

Reid had planned to spend the day working through a bill to promote job creation through a series of tax incentives for small businesses that expand their payroll with new workers or through raises. But McConnell objected first thing in the morning, and called for a different vote.

So long as we’re talking about taxes, McConnell argued, why not have a vote on Obama’s tax plan?

A noticeably agitated Reid refused the offer.

“We’ll get to the tax issues ... but right now, before this body, is a small-business jobs bill,” he said. “There’s been a direct attack on that legislation by saying let’s do something else.”

No, Republicans haven’t suddenly fallen in line behind Obama when it comes to tax policy. They just wanted to point out that all the Democrats haven’t, either.

“On Monday, the president said that if the Senate passes this tax hike on small businesses, he’d sign it right away,” McConnell said, suggesting the Senate vote on both Obama’s proposal and a Republican alternative that would extend tax breaks for all income levels. “I’m a little surprised we’re not willing to give the president what he asked for, which is a vote on a clear distinction for the American people so they can understand how the two sides look at this important issue.

“We enjoy discussing our differences of opinion on the tax issue.”

If this argument sounds familiar, it’s because it played out almost to the letter two years ago, when Congress was debating an extension of the Bush-era tax cuts. Back then, under Republican pressure, Obama gave in and allowed tax cuts at all levels to be extended through the end of this calendar year.

Republicans don’t like the idea of letting those tax cuts for the rich expire today any more than they liked it two years ago. But as Reid indicated Tuesday, not all Democrats have toed the line, either.

“We have a pretty clear position in our caucus. I can’t say unanimous, but ... generally, virtually everybody agrees that we should do everything we can for the 98 percent,” Reid said.

Democrats estimate 98 percent of the population earns less than $250,000 a year.

There’s still a handful of Democrats, however, including Nevada Rep. Shelley Berkley, who want to extend tax breaks for the 99 percent — those who make up to $1 million a year.

“Congresswoman Berkley believes Washington must start prioritizing Nevada middle-class families and small businesses ahead of Wall Street millionaires and Big Oil companies, which is why she supports extending tax relief for all families earning less than $1 million,” said Xochitl Hinojosa, a spokeswoman for Berkley’s Senate campaign. “However, she is open to all proposals that extend tax relief for middle-class families and would support the president’s plan.”

In the Senate, however, not all Democrats are quite ready to cast votes for the president’s plan. In the past week, Sens. Bill Nelson, Claire McCaskill and Robert Menendez have said they don’t agree with the $250,000 threshold.

That disunity at the margins — involving some of the incumbents in 2012’s closest Senate races — is precisely what McConnell wanted to expose when he proposed a double-header vote on taxes.

But like all the best awkward moments in the Senate, Wednesday morning’s face-off ended up descending into a fight about the filibuster.

“We’ll have this tax debate, we’re fine, we’re happy to do that, but let’s get this done first,” Reid said, accusing Republicans of bringing up taxes just as a way of killing the Democrats’ small-business jobs bill in favor of a Republican alternative.

Reid calls the Republican bill “the help Paris Hilton legislation” because it extends tax breaks to all small businesses, regardless of whether they created jobs. Neither one is likely to have a life expectancy beyond the Senate, since tax bills are supposed to start in the House.

“Again and again and again and again, scores of times during the last 18 months, we’re engaged in a filibuster to divert attention from what we’re doing today, to obstruct,” Reid said, proceeding to quote a definition of the word "filibuster" replete with its Dutch-based etymology.

“We have here in big, Las Vegas neon flashing on-and-off signs, that Grover Norquist won,” he added. “If we’re serious about reducing the deficit, we can’t keep handing out more tax breaks to the richest of the rich.”

Grover Norquist is the head of Americans for Tax Reform and the author of a pledge most Republicans in the Senate, including Nevada Sen. Dean Heller, have signed pledging not to raise taxes.

“I think we’ve just witnessed here a new definition of a filibuster,” McConnell said. “I’m trying to get a vote, not one but two, on what he says he’s for ... somehow, that’s a filibuster?”

But Reid rarely walks away from the political table short what would at least appear to be a winning hand. And after a morning of setting it up, and an afternoon of meetings at the White House, he played it.

“Let’s lock in an agreement to permit a vote on the president’s plan to give 98 percent of Americans certainty their taxes won’t go up ... Democrats are ready to have those votes right away,” Reid said, apparently reversing his earlier position — conditionally. “We’ll do it with a simple majority.”

McConnell had been hoping to embarrass Democrats by showing there was discord in their ranks, but he could only score that political point if he was sure the bill had no chance of passing. Because McConnell has just 47 Republicans in the Senate, he can only do that when by threatening a filibuster — which would force Reid to have to come up with 60 votes.

Had he agreed to Reid’s deal, Democrats might have carried the bill with just 50 votes, which would be a major loss for Republicans on the tax fight.

“I cannot at this time agree to lock in a vote at an indeterminate time on a proposal that has not yet been written,” McConnell said.

Was Reid calling McConnell’s bluff or making a solid offer? Reid’s spokesman indicated after the fact that Democrats thought they had at least 50 votes in favor of the legislation, enough for a simple majority.

But all of that doesn’t matter now. There won’t be a vote until later in July, after Reid successfully called McConnell’s gamble.

“Mr. President,” Reid protested with faux innocence to the presiding Senate chair Wednesday evening, after Republicans objected to his no-filibuster counteroffer. “I’m only trying to do what they said they wanted to do this morning.”

And with that, the Senate wound up right back where it started: Still divided and deadlocked on taxes, but back on the schedule Reid dictated.