U.S. business wants hearings on Bush-era tax cuts
WASHINGTON (Reuters) - The biggest U.S. companies stepped up their lobbying on Monday to block Democrats' plans to let taxes on wealthier Americans rise at year's end, asking lawmakers not to cut short the hearing process in Congress.
The Senate is set to take up expiration of tax cuts on nearly all individuals enacted under former President George W. Bush when it reconvenes in September. The thorniest issue involves taxes for the top income classes -- families earning at least $250,000 a year -- which President Barack Obama and most Democrats want to let expire.
The debate comes with unemployment stubbornly stuck near 10 percent and as the November elections near. The U.S. unemployment rate is 9.5 percent, according to the latest government figures, which translates into 14.6 million people out of work.
"The pressure is still on to let the top (tax) rates go up to the higher levels, but the public is really split," said Anne Mathias, an analyst at Concept Capital in Washington.
Republicans and business contend that raising taxes on the top income classes will choke the economic recovery, and they are demanding that Democrats commit to "regular order" in the Senate. That process includes hearings, mark-up of legislation and then movement to the Senate floor for a vote.
"That is the only way to ensure that these critically important policies -- policies with as broad an impact as anything the Senate has considered or is likely to consider this year -- are fully and fairly debated," the Chamber of Commerce, the National Association of Manufacturers, and other trade groups said in a letter to Senators dated Monday.
The battle will likely affect the mid-term congressional elections, where Republicans hope to win control of at least one chamber of Congress. Democrats currently control both the House of Representatives and the Senate.
The business groups pleaded with senators to urge Majority Leader Harry Reid not bring a tax bill directly to the floor, a power he has to short-circuit the regular process of committee hearings.
Both sides agree that only about 2 to 3 percent of Americans would be directly affected by letting the rates on the top two income groups expire. They disagree on the impact on the economy.
Several conservative Senate Democrats have backed extending all the lower tax rates, at least temporarily. That suggests Democrats will be scrambling for 60 votes to prevent a debate-extending filibuster and might be tempted to bring a tax bill directly to the floor.
Polls have shown the public divided, though one last Friday found overwhelming backing for Obama's plan. The CNN poll found 51 percent of Americans back Obama's plan to let rates for the wealthier rise, with 31 percent favoring renewal of the lower tax rates for all income groups.
Under the plan backed by Democrats, the top two tax brackets would rise from the current 33 and 35 percent to 36 and 39.6 percent.
(Reporting by Kim Dixon, editing by Matthew Lewis)