Why Senate Republicans Hold All The Cards In The Legislative Fight Over Bush Tax Cuts

Congressional Republicans were thrown for a loop this weekend when House Minority Leader John Boehner confessed that, if forced, he’d vote for tax legislation that doesn’t extend low tax rates for rich people. But if they’re concerned that Boehner might throw in the towel, they’re also are assuaged by the fact that growing numbers of Democrats have been joining their side, urging their own leadership to freeze all tax rates, even for the wealthy.

“So far, the only people stating new positions are Democrats opposing tax hikes,” said Don Stewart, spokesman for Senate Minority Leader Mitch McConnell, downplaying Boehner’s remarks. If the top bracket tax cuts expire, he adds, “hundreds of thousands will pay higher taxes next year. Republicans and a growing chorus of Democrats oppose that outcome.”

Over the next several days, Democrats and Republicans will stake out their final positions on the Bush tax cuts. After members return to Washington, the political and legislative strategies they adopt will determine both whether the wealthiest Americans continue to get a break, and the extent to which Democrats suffer a beating at the polls in November.Democratic leaders are trying desperately to make the tax cuts for the rich a referendum point for this election, pressing Republican rank and filers to go on the record: Would they vote for or against a tax bill that doesn’t extend the Bush tax cuts for the rich? On that score, Boehner gave Democrats a boost yesterday when he acknowledged, “If the only option I have is to vote for [tax cuts] at 250 [thousand dollars] and below, of course I’m going to do that.” That admission tells Democrats something important: if House leaders push legislation that does not extend the tax cuts for the rich, it will probably pass. That would allow them to have a separate fight over handing out tax breaks to rich folks in isolation. That’s where the White House wants to go.

But they have two big problems. First is that in the day’s before Boehner’s much-scrutinized remark, conservative Democrats in both the House and Senate are leapfrogging each other with public calls to extend the Bush tax cuts to everybody. Reps. Glenn Nye (D-VA), Melissa Bean (D-IL) and others are drafting a letter to House leadership urging them to keep tax rates where they are across the board. And in a statement this morning, Sen. Joe Lieberman (I-CT) went further. “I will do everything I can,” he said, “to make sure Congress extends the so-called Bush tax cuts for another year and takes action to prevent the estate tax from rising back to where it was.”

And the Senate is where those who favor tax cuts have real leverage. Ultimately a great deal depends on what strategy Majority Leader Harry Reid pursues. Top Senate Republican and Democratic aides suggest that Republicans (along with some Democrats) might filibuster tax legislation unless it freezes the tax rates altogether. If they do, it will validate the White House’s contention that the GOP is holding tax cuts for the middle class “hostage.” But with Democrats still running away from the White House on this, there’s still no telling who wins the fight. Somebody has to budge, or else all the Bush tax cuts expire — something all sides desperately want to avoid.