The business tax bill stalled over partisan disagreement on the broader question of how and when to extend the Bush cuts, which expire at the end of the year.
GOP senators objected to a move by Senate majority leader Harry M. Reid to prevent votes on amendments to the measure. Reid acted as the two parties could not agree on how to use the bill to vote on whether to extend the Bush tax cuts.
Republicans favor extending the tax cuts, first enacted in 2001, for another year for all income levels. President Obama has proposed extending them for a year only for those taxpayers earning annual income up to $250,000, and using the tax revenue collected to help close the deficit.
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The small-business tax cut bill died on 53 to 44 vote â€”it needed 60 votes to move ahead â€” amid bickering between the parties over which side was more anxious to hold an immediate vote on the Bush tax cut issue.
Democrats charged that the vote was a sign the GOP was willing to block anything that might boost Obamaâ€™s reelection prospects.
â€˜â€˜Republicans are blocking this bill for no other reason other than that they think passing it might help the president and help the economy,â€™â€™ said Senator Charles E. Schumer, Democrat of New York.
Republicans called the vote a political exercise, and Democrats would not have blocked debate on amendments if they really wanted to have a full discussion about using tax cuts to help the economy.
â€˜â€˜Hereâ€™s the Democrat-controlled Senate, blocking votes, blocking debate, and hosting private meetings with the presidentâ€™s political advisers on political strategy instead of working on serious, bipartisan solutions,â€™â€™ said Senate Minority Leader Mitch McConnell of Kentucky.
The legislative maneuvering came as both parties work to sharpen their message on taxes heading into the November election.
Both the House and Senate plan votes before the August recess on whether to extend the Bush tax cuts, but these are legislative fights designed largely as fodder for campaign ads.
The end-of-year deadline means Congress must make a decision at some point about whether to extend the tax cuts.
Votes taken on the expiring tax cuts before the election will probably not resolve the issue but they could provide each party leverage as they enter postelection negotiations on the issue, along with how to avert the deep budget cuts also scheduled to go into effect in January.
â€˜â€˜The fact is that this December 31st deadline is pushing us to some decisions that we have put off for way too long,â€™â€™ said Senator Dick Durbin, Democrat of Illinois.