Senate GOP to Dems: Move on Bush tax cuts this summer

By Bernie Becker - 05/17/12 06:37 PM ET

The vast majority of GOP senators on Thursday pressed Democrats to quickly extend current tax rates, arguing that allowing them to lapse would be the biggest tax increase ever in the United States.

Forty-one senators in all said that Congress should move this summer on continuing all of the current tax cuts, first enacted under George W. Bush and last extended in 2010, and that failing to extend the rates would be an anchor on an economy that is also scheduled to absorb steep automatic spending cuts.

That combination of tax increases and spending cuts has been alternately dubbed a fiscal cliff or "Taxmageddon," and analysts have said that the full weight of both could send the country tumbling back into recession. Current tax rates expire at the end of the year, while the spending reductions start in January.

“We can think of no better steps to take than to address the recessionary threat of Taxmageddon and eliminate some of the uncertainty that continues to contribute to economic malaise,” they wrote to Majority Leader Harry Reid (D-Nev.).

Still, most Washington observers believe Congress and the White House will push back much of their work on those issues to a lame-duck session after November's election.

The Senate Republicans also said Thursday that congressional Democrats and President Obama have not aggressively pursued policies that would stimulate the economy, and have instead undertaken “misguided redistributionist policies” like the Buffett Rule.

“The American people have made it clear that they are not interested in politically motivated redistribution of wealth,” the senators wrote in the letter spearheaded by Sen. Orrin Hatch (Utah), the ranking Republican on the tax-writing Finance Committee. “Taxpayers know that the surest way to achieve fairness and equality is by giving people greater opportunity.”

The GOP leadership in the Senate also signed the letter.

But Washington Democrats, after having consented, in the 2010 lame-duck session, to two more years of all the Bush tax cuts, have said that they will not sign off on extending the cuts for the wealthiest taxpayers again.

Democrats do support extending the Bush tax cuts for the middle class, and have cited polling showing that Americans generally support higher taxes on millionaires.

The White House and lawmakers in the party have also said that the wealthiest need to contribute more revenue to help rein in the current steep deficits, and to help protect entitlement programs, education and other initiatives. For the most part, GOP lawmakers oppose using tax increases to help battle the federal debt.

“The president believes it is essential, as we reduce our long-term deficits, to expand investments in key areas that will help increase long-term growth and improve opportunity,” Treasury Secretary Timothy Geithner said Thursday.

House Speaker John Boehner (R-Ohio) also said this week that his chamber would extend Bush-era tax policy before November’s election, while also attaching a fast-track procedure for tax reform in 2013.