Bloomberg News

Senate Democrats Said to Weigh Millionaire Tax in Job Bill

October 04, 2011

(Updates with statement from White House communications director in seventh paragraph.)

Oct. 4 (Bloomberg) -- Senate Democrats are weighing a plan to substitute a surtax on millionaires for a package of tax increases President Barack Obama proposed to pay for his $447 billion job-creation plan, a Democratic aide said.

Majority Leader Harry Reid outlined the concept to Senate Democrats during a closed-door meeting today, said the aide familiar with the discussions, who wasn’t authorized to speak publicly. The aide said it wasn’t determined how the surtax would work or if it would be used to partly or entirely replace the increases proposed by Obama.

Obama wants to pay for his plan by capping itemized deductions for individuals earning more than $200,000 a year and married couples earning more than $250,000. The plan would also boost taxes on private equity firms and end oil and gas subsidies. Some Senate Democrats are objecting to those tax increases.

Senator Chuck Schumer, a New York Democrat, last year unsuccessfully pushed an amendment that would have allowed Bush- era tax cuts to expire for millionaires.

Obama is trying to bolster the economy at a time when the nation’s unemployment rate has reached 9.1 percent. He proposes cutting payroll taxes, spending more on infrastructure and modernizing schools to stimulate employment.

Senate Maneuvering

Obama’s plan is opposed by Republicans who control 47 of the Senate’s 100 seats. Reid told reporters today that Democratic leaders are seeking changes to the measure that could draw more support, at least within their party. He said he plans to bring the jobs bill up later this month, though he would need 60 votes to begin debate.

White House communications director Dan Pfeiffer said in a statement tonight that the administration has “offered a balanced way to pay for the American Jobs Act, but if Congress has a better idea that ensures that everyone pays their fair share, we’re open to it.”

Obama has been traveling the country, calling on lawmakers to take swift action on his proposal. Today he went to a community college in the Dallas suburb of Mesquite to promote it, targeting House Majority Leader Eric Cantor, a Virginia Republican, for saying the full proposal won’t be put to a vote in the chamber.

Senate Minority Leader Mitch McConnell, citing the president’s comments, tried unsuccessfully to get a Senate vote today on Obama’s plan, which leaders in both parties knew would fail.

‘A Good Approach’

“It won’t surprise anyone to know I don’t think it’s a good approach, a way that’s likely to create jobs, but he’s asked for a vote,” McConnell, a Kentucky Republican, said on the Senate floor. “I think we ought to accommodate the president of the United States on a matter that he has been speaking about frequently over the last few weeks and give him his vote.”

Reid dismissed the move as a “political stunt,” and said he will advance a modified jobs bill within two weeks.

White House spokesman Jay Carney called McConnell’s move a “disingenuous” effort to draw attention away from Obama’s effort to boost job creation.

--With assistance from Roger Runningen in Washington. Editors: Laurie Asseo, Don Frederick

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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