US Senate does something unbelievable: passes a bill

Taxmaggedon's not averted, but the competition is on fair ground

The United States got a little more likely to avoid Taxmaggedon yesterday, as the Senate voted narrowly to pass the Democrats' bill extending "middle-class" tax cuts 51-48.

On December 31st, 2012, the tax cuts passed by George Bush will all expire at once, along with a number of other tax cuts and spending provisions. If this isn't averted, the resulting economic shock – dubbed a "fiscal cliff" by Fed chairman Ben Bernanke, and Taxmaggedon by others – has been predicted to knock 4 per cent from US growth in 2013.

The strange thing about the situation, though, is that both parties want to avert it. Unfortunately, their chosen outcomes are different enough that each would rather let the nation burn and blame it on the other than pass something they don't agree with.

The desired outcome for Republicans is keeping all the tax cuts except for two – Obama's payroll tax cut, and the tax cuts implemented in the 2009 stimlus package. Not coincedentally, these are two of the cuts which affect low-income people most, and as a result, the party isn't hugely eager to mention that they are in favour of repealing them with the "Tax Hike Prevention Act of 2013" (which will directly implement tax hikes. America).

The Democrats, however, want to keep those low-income tax cuts, and also all of the Bush tax cuts up to $250,000 per year. Despite the fact that only 2 per cent of the country earns above that, they have come to be called the "middle-class" tax cuts. In return, they want to soak the rich a bit more, reverting marginal tax rates above that level to where they were in the Clinton era, and implementing the so-called "Buffet rule" to prevent brazen tax avoidance.

It is clear, however, that there are a large number of tax hikes which both parties want to avoid. So why the reticence? Because after the election – indeed, after Taxmaggedon actually takes effect – it will be a lot easier to get bipartisan support. Right now, the Democratic position involves tricking or cajoling Repbulicans into voting for tax hikes, even if only on the rich. But coming to that same position in 2013 will involve voting for tax cuts, since the hikes they want will happen automatically. That vote is a far more palatable prospect.

So while the Democrat-controlled Senate passed the their preferred bill, the Republican House of Representatives in gearing up to reject it out of hand. It will not make it to the President's table in this form, and nothing is likely to until at least November. 

But there is, buried in this, a small bit of good news. Because the Senate did something rather unusual: they had a vote which was won by the side with the most people on it. Normally, the arcane standing orders of the Senate require a supermajority, of at least 60, to win any vote - otherwise it can be filibustered indefinitely, preventing any other business from occurring. The fact that this was passed by a simple majority could mean a simmering of tensions on the matter, or an eagerness (however slight) to work together. Or it could be that they knew it wouldn't pass the House and weren't in a mood to fight.

Time, as ever, will tell.

Senate majority leader Harry Reid, the Democrats' man in the Senate. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Who will win in Manchester Gorton?

Will Labour lose in Manchester Gorton?

The death of Gerald Kaufman will trigger a by-election in his Manchester Gorton seat, which has been Labour-held since 1935.

Coming so soon after the disappointing results in Copeland – where the seat was lost to the Tories – and Stoke – where the party lost vote share – some overly excitable commentators are talking up the possibility of an upset in the Manchester seat.

But Gorton is very different to Stoke-on-Trent and to Copeland. The Labour lead is 56 points, compared to 16.5 points in Stoke-on-Trent and 6.5 points in Copeland. (As I’ve written before and will doubtless write again, it’s much more instructive to talk about vote share rather than vote numbers in British elections. Most of the country tends to vote in the same way even if they vote at different volumes.)

That 47 per cent of the seat's residents come from a non-white background and that the Labour party holds every council seat in the constituency only adds to the party's strong position here. 

But that doesn’t mean that there is no interest to be had in the contest at all. That the seat voted heavily to remain in the European Union – around 65 per cent according to Chris Hanretty’s estimates – will provide a glimmer of hope to the Liberal Democrats that they can finish a strong second, as they did consistently from 1992 to 2010, before slumping to fifth in 2015.

How they do in second place will inform how jittery Labour MPs with smaller majorities and a history of Liberal Democrat activity are about Labour’s embrace of Brexit.

They also have a narrow chance of becoming competitive should Labour’s selection turn acrimonious. The seat has been in special measures since 2004, which means the selection will be run by the party’s national executive committee, though several local candidates are tipped to run, with Afzal Khan,  a local MEP, and Julie Reid, a local councillor, both expected to run for the vacant seats.

It’s highly unlikely but if the selection occurs in a way that irritates the local party or provokes serious local in-fighting, you can just about see how the Liberal Democrats give everyone a surprise. But it’s about as likely as the United States men landing on Mars any time soon – plausible, but far-fetched. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.