Senate battles over business tax cuts

WASHINGTON -- The Senate rejected rival Democratic and Republican plans for cutting taxes on businesses Thursday, with both parties refusing to yield ground in their election-year struggle over how best to spark the economy.

Each side said the other's bill would not do enough to make a difference for struggling families and businesses looking for help. Underscoring the sharp partisan elbows being thrown as November's presidential and congressional elections draw near, they swapped charges that the other party was letting political goals trump real efforts to revive a job market that everyone agrees has been sputtering for too long.

"We're in the midst of another Senate floor show, pursuing legislation that will get the president and his allies campaign talking points but will do absolutely nothing to spur economic growth and job creation," said Sen. Orrin Hatch (R-Utah).

"There's no reason for them to oppose this bill, other than they're trying to hurt President Obama, small businesses and the middle class," said Senate Majority Leader Harry Reid (D-Nev.).

Thursday's showdown was a precursor to a bigger battle under way over renewing reductions in income tax rates, dividends and other levies on most taxpayers that will otherwise expire in January.

President Barack Obama and Democratic leaders want to let tax rates rise for households earning more than $250,000. Republicans want the cuts extended for everyone, pitting Democrats' fairness arguments against GOP claims that higher taxes on the rich thwart job creation.

The Democratic bill cutting business taxes was derailed 53-44, seven votes short of the 60 needed to overcome GOP procedural barriers. Sen. Joe Manchin of West Virginia was the only Democrat to oppose it, while Sens. Scott Brown of Massachusetts and Dean Heller of Nevada were the only Republicans to favor it. All three face tight re-election races. Minutes earlier, the GOP version was turned aside 73-24.