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Senate GOP block tax cuts bill

WASHINGTON - Senate Republicans derailed legislation yesterday to extend expiring tax cuts at all but the highest income levels in a political showdown that paradoxically clears a path for a compromise with the White House on steps to boost the economy.

"We need to get this resolved and I'm confident we can do it," President Barack Obama said shortly after the near party-line votes. The public must have "the peace of mind that their taxes will not go up" on Jan. 1, he added.

Obama has signaled that he will bow to Republican demands for extending tax cuts at all income levels.

Sen. Chuck Schumer (D-N.Y.) accused Republicans of siding with "millionaires and billionaires" with their rejection of proposals that would let tax cuts passed during George W. Bush's presidency lapse on seven-figure incomes.

Republicans noted that unemployment has risen to 9.8 percent and said it made no sense to raise taxes on anyone in a weak economy. Sen. Jon Kyl (R-Ariz.) said that Democrats were undergoing a "political catharsis" in public after losing control of the House and surrendering several Senate seats in the Nov. 2 election.

But the rhetoric subsided quickly after the votes, and Senate leaders in both parties said they hoped political clashes would give way to compromise in the next several days.

Kentucky Sen. Mitch McConnell, the GOP leader, said he was relatively confident there would be a deal with the White House "not to raise taxes in the middle of a recession."

In the Senate, a bill to extend the tax cut policies on the first $200,000 of an individual's income and the first $250,000 for a married couple was blocked on a vote of 53-36.

The second measure would have let taxes rise on incomes over $1 million. It appeared crafted to appeal to senators from states with large high-income populations, as well as cast Republicans as protectors of the rich. It was blocked on a vote of 53-37.

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