Millionaire surtax proposed by Senate Democrats to pay for Obama jobs package
Senate Democratic leaders on Wednesday introduced their own plan for paying for President Obama’s jobs package, proposing a 5 percent surtax on millionaires to cover the cost of the $447 billion initiative.
Senate Majority Leader Harry Reid (D-Nev.), Majority Whip Dick Durbin (D-Ill.) and Democratic Policy Committee Chairman Charles Schumer (D-N.Y.) unveiled their counter-proposal to the White House’s plan at a Capitol news conference Wednesday morning.
“This is a change from the original proposal, but we’ve consulted with the White House on this and they’re fine with the idea,” Schumer said. “In fact, their pay-fors were a trigger, and the president from the beginning said he welcomes alternative ways of paying for it. We think we have found the best way to pay for it, and we believe this package reflects our priorities and the president’s priorities.”
The White House’s original jobs plan calls for the 12-member debt reduction “supercommittee” to come up with the nearly half-trillion dollars’ worth of deficit savings necessary to cover the cost of Obama’s proposal. If the supercommittee is unable to find those savings, then the White House plan would pull the “trigger” on a proposal that would generate $467 billion in new revenue over the next decade by closing tax loopholes benefiting oil and gas companies as well as eliminating deductions for individuals earning more than $200,000 and families earning more than $250,000 a year.
But as Durbin noted in a radio interview last week, some lawmakers from oil-producing states had balked at the provisions targeting oil and gas companies, while other members objected to the $200,000 and $250,000 income thresholds as too low.
Senate Democrats’ revised plan would generate about $447 billion in new revenue through the additional five-percent tax on individuals earning more than $1 million a year, the leaders said Wednesday.
Schumer – who during last year’s lame duck session introduced a measure that would have let the Bush-era tax cuts expire for those earning $1 million or more -- said that drawing the line at the higher threshold was “the right thing to do.”
“In the eyes of many, it is hard to ask more of households that make $250,000 or $300,000 a year,” he said. “They are not rich, and in large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that’s associated with wealth in America. It also would affect too many small businesses if you drew the line below a million dollars.”
Sen. Mary Landrieu (D-La.), one of the lawmakers who balked at the original proposal, said in a statement Wednesday that Reid’s move was “a key step in the right direction.”
“I applaud Senator Reid’s leadership in finding a way to pay for President Obama’s jobs package that doesn’t onerously target a single sector of our economy that is critical to our economic recovery and energy security,” Landrieu said. “The oil and gas industry contributes billions of dollars to our economy each year and supports more than 9 million American jobs, including 300,000 in Louisiana. I am pleased that Leader Reid heard our concerns and has taken a much-improved approach to paying for this important legislation.”
Public opinion is solidly on the side of Democrats and the White House when it comes to raising taxes on the wealthy, as Paul Kane and Scott Clement report in this morning’s Post.
Seventy-five percent of respondents in the latest Washington Post-ABC News poll -- including majorities of independents, moderates, conservatives and Republicans -- support raising taxes on millionaires.
One of the few groups opposed to increasing taxes on those earning more than $1 million dollars a year is tea-party supporters.
Senate Democratic leaders argued Wednesday that their new proposal would make it “very tough for Republicans to oppose the president’s jobs package.” Even so, throughout the jobs and deficit-reduction debate, Republicans have remained steadfastly opposed to any measure that would increase taxes.
Schumer’s legislation aimed at millionaires at the end of the last Congress failed to secure any Republican support – and in fact, the bill lost the support of four members of the Democratic caucus, including Durbin.
Reid reiterated Wednesday that he believed “most Democrats” would back the new proposal, although he stopped short of predicting unanimous support. He added that he and other leaders “look forward” to amendments being offered once the bill comes to the floor later this month.
House Minority Whip Steny Hoyer (D-Md.) told reporters Wednesday afternoon that he supports both the original Obama proposal and the one unveiled by Senate Democrats.
“The Senate has an alternative that will accomplish the same objective in a different way,” Hoyer said. “We’ll certainly consider it over here, and I think we’d be very pleased to support it. In fact, some of our members may like that alternative better. I’m sure that’s the case, as a matter of fact, but ... as the whip I haven’t made a count on that.”
He also took aim at House Republican leaders for declining to bring the Obama jobs package to the floor.
“The important thing is that we urge our Republican colleagues, bring to the floor a bill,” Hoyer said. “If it’s their bill, so be it. Allow us to offer amendments to it. If it’s our bill, and if it’s the president’s bill, fine. They can offer amendments to it. Let the American public see who wants to vote to create jobs in the short term and in the long term.”
In the Senate, Minority Leader Mitch McConnell (R-Ky.) on Tuesday pushed for an immediate vote on Obama’s jobs package. But Reid blocked the move, which he called a “political stunt,” and pledged that he would bring the jobs measure to the floor before the month is out.