Senate Vote On Extending Tax Cuts More Likely Before Than After The Election

It's hard for me to disagree with Pete's reporting and analysis in his post from July 14 that Congress will likely vote to extend the tax cuts enacted during the Bush administration in a lame duck session after the election.

But Pete's statement is misleading.  Although Congress as a whole is more likely to act after the election, the Senate is far more likely to debate and pass the extension before the election.  In fact, the only way the Senate may be able to get enough votes to stop what may be a virtually inevitable filibuster is if it acts before anyone goes to the polls in November.

The calculus for the Senate Democratic leadership has become a bit easier in recent days as the Republican leadership has increasingly indicated it wants all of the tax cuts -- including the three provisions (the 35 percent top marginal rate on individual income and the 15 percent rate on dividends and capital gains) whose extension the White House did not propose -- included in the bill.  That provides a strong clue to what's ahead: a filibuster in the Senate if the tax extension does not include these provisions. 

That kicks in what by now is the standard voting analysis.  There are 59 Senate Democrats, but at least one (probably Ben Nelson of Nebraska) is likely to vote with the GOP on this issue.  That forces Democrats to look for two Republican votes to get the 60 needed to invoke cloture.

As yesterday's vote on extending unemployment benefits shows, if the vote is taken after the election, there are only three GOP senators likely to vote with the Democrats: Scott Brown (MA), Olympia Snowe (ME), and Susan Collins (ME). 

But several others could be in play if the vote is taken before and that will make the debate far easier to manage. The reason is simple.  Those senators who vote against cloture on the tax extension debate before the election will create a substantial political problem for themselves because their vote will be characterized as preventing the tax cut for millions of middle class taxpayers from staying in place and, therefore, and increase in taxes.  The GOP senators will say, of course, that this will be taken care of in a lame duck session.  But, given the limited amount of trust voters have these days in what they are told by elected officials, a vote and outcome that is promised to happen in the future won't be as powerful as one actually already taken.

A vote before the election will neutralize some GOP senators who otherwise would vote in lock-step with their leadership every tax issue.  For a handful of GOP senators, the Democrats raising the "they-are-preventing-you-from-getting-a-tax cut-and-here's-the-vote-that-proves-it" claim may make it impossible not to vote with the Democrats.  As a result, the number of potential GOP votes could rise from the three usual candidates to as many as ten. 

This same situation doesn't exist in the House because, with a substantial margin and no possibility of a filibuster, a vote after the election will be much the same as one before.  In addition, voting after the election on a tax cut extension without the top marginal rate, dividends, and cap gains provisions will be easier for many House members who would prefer not having to explain why they weren't included.