–Democrats Have Not Yet Decided Tax Plan
–Senate Finance Chief Expected To Release His Plan This Week

By John Shaw

WASHINGTON (MNI) – Sen. Charles Schumer, the third ranking Senate
Democrat, said Wednesday that Democrats have not yet settled in on their
strategy for pushing middle class tax cuts this fall.

Speaking to reporters at a press conference on campaign finance
issues, Schumer was careful and evasive when pressed to describe
Democratic plans related to extending portions of the 2001 and 2003 tax
cuts.

“That’s being discussed,” Schumer said when asked if a tax cut vote
is likely to occur next week in the Senate.

When another question was posed to Schumer, he said “ask Leader
Reid,” referring to the Senate Majority Leader Harry Reid.

Reid has said he expects a tax cut vote before Congress leaves to
campaign for the Nov. 2 mid-term elections.

There are growing signs that both the House and Senate may end
their fall sessions at the end of next week, returning to Washington
after the elections for a Lame Duck session of uncertain length.

Senate Finance Committee Chairman Max Baucus is expected to unveil
his tax cut plan as early as Thursday.

Baucus’s plan is expected to extend tax cuts for individuals making
up to $200,000 and couples earning up to $250,000. It may also extend
the expired estate tax.

Baucus has said he would like the Senate to vote on the plan soon.
“We have to vote before the election to show people where we are. It’s
the right thing to do,” Baucus said earlier this week.

House Democratic leaders have said they will wait for the Senate to
act before deciding on how they to deal with the tax cut issue.

But all signs point to a symbolic battle over taxes on the Senate
floor next week.

Senate Minority Leader Mitch McConnell has indicated he would like
a far reaching debate on tax issues with votes on a number of
amendments. This could not occur over a week. Many relatively minor tax
bills often take weeks in the Senate, so it is highly unlikely the issue
could be resolved in a week.

It seems quite likely that Senate Democratic leaders next week will
make a motion to pass the middle class portion of the Bush tax cuts and
that McConnell will object.

Then McConnell is likely to make a counter motion, calling for
passage of the entire array of Bush era tax cuts which Reid would object
to.

Under this scenario, the tax debate would end in a stalemate this
fall and be resolved after the elections.

The Obama administration and congressional Democrats have
repeatedly said that tax cuts for individuals making up to $200,000 and
couples earning up to $250,000 should be extended.

Congressional Republican leaders have supported extending all of
the 2001 and 2003 tax cuts.

** Market News International Washington Bureau: (202) 371-2121 **

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