Senate GOP threaten to block tax hike for wealthy

WASHINGTON - President Barack Obama claims it's still a "wrestling match," but with Senate Republicans in uniform opposition, his plan to raise taxes on wealthier people while preserving cuts for everyone else appears increasingly likely to founder before Election Day.

Both Republicans and Democrats are already using the looming expiration of Bush-era tax cuts as a defining battle in elections to determine control of Congress that are just seven weeks away.

Gridlock appears to be an increasingly likely result in the Senate. Republicans said they had the votes to block legislation to extend the middle-class tax relief if Democrats follow through on their plan to deny tax breaks for the wealthiest Americans. The issue is more likely to be decided in a postelection session.

Sen. Jon Kyl of Arizona, the GOP whip, said yesterday that his party was united in opposing Obama's proposed tax hike on the wealthy. "Just before the recess we had a meeting and we discussed this, and every Republican was absolutely supportive of the idea that there shouldn't be any increases in taxes," Kyl said.

Congressional analysts say renewing the tax cuts for everyone would cost the government $4 trillion over the next decade. With polls showing a broad public anger over spiraling federal deficits, Obama wants to exclude individuals earning more than $200,000 and couples making $250,000-plus - who account for $700 billion of that total. They represent about 3 percent of taxpayers, according to the Tax Policy Center, a Washington think tank.

"Only in Washington could someone propose a tax hike as an antidote to a recession," GOP leader Mitch McConnell of Kentucky said.

McConnell has said a bill extending the tax cuts for only low- and middle-income earners cannot pass the Senate, but he declined to repeat that threat yesterday. Republicans hold 41 seats, the minimum needed for a successful bill-killing filibuster, though McConnell spokesman Don Stewart declined to say whether all 41 would support a filibuster.

Some Democrats are siding with Republicans against raising taxes on anyone during a fragile economic recovery.

"I don't think it makes sense to raise any federal taxes during the uncertain economy we are struggling through," Sen. Joe Lieberman, a Connecticut independent who aligns with Democrats, said yesterday.

At issue is a year-end deadline to renew a variety of tax cuts enacted in 2001 - when the federal government was running a surplus. They include lower rates, a $1,000 per-child tax credit, relief for married couples, and lower taxes on investments.

On Sunday, House GOP leader John Boehner said if that was his only choice he would support renewing tax cuts for the middle class but not the wealthy.