Schumer: Still a chance for grand bargain

The New York Democrat also told reporters on Wednesday that, while Boehner’s plan to allow tax rates to rise on income over $1 million was bad policy, the silver lining was that it showed congressional Republicans were willing to back a rate above the current top 35 percent.

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“If it’s going to pass with Republican votes, at the very minimum it will show that a significant majority of Republicans no longer stick to the doctrinaire position that you can’t go above 35 percent,” Schumer said. 

Schumer, joined by Sen. Tom Harkin (D-Iowa), noted that many millionaires would still see a tax cut under Plan B, because the proposal does not reinstate rules meant to limit how much the highest taxpayers can write off. 

In its most recent offer, the White House moved to reinstate those rules – so-called PEP (Personal Exemption Phase-out) and Pease – for those making more than $250,000 a year, and have said the GOP proposal amounts to a $50,000 tax cut for the wealthy.

Harkin and Schumer also blasted Republicans for proposing to allow expansions of three separate tax breaks – the Earned Income Tax Credit (EITC), the American Opportunity Tax Credit and the child tax credit – to expire. All three tax credits were expanded in the 2009 stimulus package.

“What Boehner is proposing is strictly a hit on the lower rungs of the middle class,” Harkin said.

The American Opportunity Tax Credit, meant to make college more affordable, has a 100 percent credit for the first $2,000 of tuition. 

The stimulus increased the amount of income eligible for the child tax credit, and expanded the EITC for families with more than three children. The EITC is aimed at lower-income working people and families.

Republicans have said that the stimulus expansions of those credits were meant to be temporary, and should expire.