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Senate passes middle class tax-cut extension

In a purely political exercise this afternoon in the Senate, Senate Democrats narrowly passed a bill 51 to 48 to extend Bush-era tax cuts for middle class Americans for another year. With Vice President Biden presiding over the Senate, Democrats lost only two votes: Sen. Jim Webb (D-Va.) and Sen. Joe Lieberman (I-Ct.), who regularly votes with Democrats.

Under the plan, income tax rates for those individuals making up to $200,000 and families making up to $250,000 would remain the same in 2013. Rates on upper income Americans would expire on Dec. 31st. 

Senate Democrats called for House Republicans to act "immediately" so the president can sign the bill into law. But House Republicans have no plans to do so. They plan to take up their own bill next week that would extend the Bush tax rates for all Americans for one year while taking up comprehensive tax reform.

The Senate Democrat bill follows through on an election-year call from President Obama to protect the middle class from an income tax hike next year. He has campaigned with the message that wealthier Americans should pay more in taxes to help reduce the national deficit. Republicans believe the Democrats bill amounts to a "massive tax increase" on almost a million small business owners.

Earlier, a Senate Republican bill sponsored by Sen. Orrin Hatch (R-UT), the ranking member of the Senate Finance Committee, to extend the Bush tax cuts for all incomes for one year was defeated 54 to 45.