The U.S. Senate voted 81 to 19 today to approve a bill to extend unemployment benefits and some tax credits for one year, in exchange for keeping current income tax rates on all income levels in place for two years. Iowa’s Chuck Grassley was among 37 Republicans who voted yes, while Tom Harkin was among 14 Democrats who voted no. (Harkin and three others voted against the bill today despite voting for Monday’s cloture motion to advance the bill.) Before today’s final vote, the Senate considered a motion to suspend the rules so that Senator Bernie Sanders’ amendment improving various tax provisions could be considered. Only 43 Democrats, including Harkin, supported that effort.

Bleeding Heartland has already covered some of the problems with this bill.  Some may wonder why a self-styled deficit hawk like Grassley would support adding $858 billion to the deficit over two years (and trillions more in the years to come, as Bush tax cuts appear almost certain to be made permanent). Grassley’s answer is that Americans are still “overtaxed,” and “We have a deficit problem because Washington spends too much.” Naturally, Republicans ignore the fact that Warren Buffett pays a lower effective tax rate than his secretary, or that corporate tax payments are at historically low levels. Statements from Grassley and Harkin on today’s vote are after the jump. Harkin’s Senate floor statement of December 14 made a more extensive case against the package.

But desmoinesdem, you might object, Republicans said a few weeks ago that they would block everything during the lame-duck session until the future of the Bush tax cuts was resolved. Well, the tax cuts have been extended, and now Republicans are threatening to shut down the federal government and block ratification of the START U.S.-Russia nuclear arms treaty. Who’d have guessed that giving in to Republican demands would lead to more hostage taking?

The House of Representatives is debating repeal of Don’t Ask, Don’t Tell today. I wouldn’t bet on Republicans letting that through the Senate, even though at least 60 senators claim to be for allowing gays and lesbians to serve openly in the military.

Chuck Grassley statement of December 15:

“Preventing a tax increase is the best thing we can do for the economy right now.  It’s common sense that you don’t raise taxes in a recession, including on employers in small business where 70 percent of new jobs are created.

“The only thing better than passing this legislation would be to make tax relief permanent.  Uncertainty about tax rates works against America’s economic recovery.  We’ve seen nearly 23,000 jobs in biodiesel disappear because its tax incentive was allowed to lapse at the end of last year.  Every small business owner who pays taxes on the individual level faces higher taxes if a tax increase isn’t prevented across the board with this legislation.  There’s a rule that if you want more of something, don’t tax it.  We want more employment, so Congress should not allow higher taxes on employment.

“This legislation extends 51 tax incentives for different sectors of America’s economy, including ethanol.  These tax policies have been extended previously because they’ve been proven to help create economic activity.  This legislative agreement also makes sure the government can’t take more than half the estates of farmers and small business owners who have scrimped, sacrificed and saved their entire lives to build up a family business by imposing a 55-percent estate tax even after those business owners spent a lifetime paying income, investment and property taxes.

“Since World War II, the tax burden has averaged 18.2 percent of the gross domestic product.  Even if Congress were to extend all of the current-law tax levels permanently, the nonpartisan Congressional Budget Office indicates that taxes as a percentage of gross domestic product will still be much higher than they have been over the last 70 years.  So, even if we were to permanently keep the tax rates at current levels, Americans will be overtaxed when compared with what they’ve paid in recent history.

“We don’t have a deficit problem because people are taxed too little.  We have a deficit problem because Washington spends too much. The deficit needs to be taken on through economic growth and reduced spending.  Revenue to the federal Treasury will continue to increase with the level of taxes as they are today, which this bill will secure for two more years.

“Congress needs to listen to the people and support less spending.  In 2010, I voted for $278 billion in spending reductions.  All of those reductions were rejected by the majority party’s leaders.”

Tom Harkin statement of December 15:

WASHINGTON, D.C. – Senator Tom Harkin (D-IA) today released the following statement after the U.S. Senate passed an agreement that provides a one-year extension of unemployment benefits for out-of-work Americans and a two-year extension of tax breaks for the country’s wealthiest.

“At a time when our annual deficit is close to $1 trillion – much of it borrowed from China; at a time when the wealthy are already enjoying a huge surge in income, even as middle-class incomes are stagnant; it is simply obscene to give another lavish tax cut to the top two percent.  Let me say what should be painfully obvious about this new bonanza for the rich: they don’t need it and we can’t afford it.  And it will not help the economy – in fact, in the longer term, it will hurt the economy.

“The fact is that these new tax breaks will make income inequality in the United States even worse.  In recent years, in the grip of the Great Recession, many millions of ordinary working Americans have lost their jobs, their homes, and/or their savings.  But the wealthy have made out very, very well.

“But I also have concerns that the nearly $900 billion in tax cuts in this agreement would crowd out necessary investments in priorities such as education, infrastructure, homeland security, health care and scientific research.  

“We needed to extend unemployment benefits for those that need it the most in this country, but that should have come without tax breaks for the wealthiest.”