WASHINGTON — Senate Democrats, divided over how to pay for President Barack Obama's jobs plan, Wednesday tossed out the White House tax proposals and replaced them with one of their own: A tax increase on millionaires.
Obama's plan to increase taxes on individuals earning more than $200,000 and joint filers making more than $250,000 was highly unpopular among some Democrats.
"Many of them are not rich," said Sen. Charles Schumer, D-N.Y. In many areas of the United States, he added, such an income "does not get you a big home or lots of vacations or anything else that's associated with wealth in America."
Obama's $447 billion proposal still faces huge trouble in the Democratic-run Senate, where it's expected to be considered next week. Sixty votes are needed to cut off extended debate, and Democrats control 53 of the 100 seats.
In addition, the package as a whole is "dead" in the Republican-dominated House of Representatives, Majority Leader Eric Cantor, R-Va., said Monday.
But at least the millionaire's tax could spare Obama the embarrassment of Democrats abandoning him on a key issue, one that he's been campaigning for day after day.
When Senate Democrats returned this week from a weeklong recess, many expressed reservations about different elements of the Obama tax plan, including the proposal to limit itemized deductions for individuals earning more than $200,000 and joint filers making more than $250,000.
Other lawmakers from energy-producing states were annoyed about the plan to close oil and gas tax loopholes.
Senate Minority Leader Mitch McConnell, R-Ky., who opposes the Obama initiative, tried to get the Senate to take an up-or-down vote on the jobs plan, but Democratic leaders blocked the effort.
On Wednesday, the package changed, as the Obama taxes were replaced by a 5 percent surtax on income of more than $1 million.
Republicans, who have been adamantly opposed to tax increases, immediately signaled they would not go along.
"Republicans have identified areas of common ground where we can work with the president and Democrats to create a better environment for job creation," said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio. "That should be our focus, not desperate tax hike gimmicks floated to cover up divisions within the Democratic caucus."
At the White House, spokesman Jay Carney said the administration's priority is passing the legislation and it's open to suggestions for how to pay for it. Carney said he wasn't fully familiar with the Senate proposal, but he suggested it's one "we think would work."
"The idea that our goal here is to use this as a political weapon, it's not," Carney said. "Our goal is to take action and put Americans back to work."
The current top tax rate is 35 percent. Democrats estimate that taxing millionaires will raise the $447 billion Obama needs to implement his jobs plan. The plan, which would boost spending for road construction, schools and aid to the unemployed, and cut the Social Security payroll tax, is still expected to go nowhere as a complete package.
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