Senate bid to renew 'middle class' tax cuts fails

Even so, Obama confident of tax cut deal before Jan. 1

The two Democratic plans to renew low tax rates for individual income up to $200,000 and up to $1 million both failed in procedural votes, as Republicans argued that low tax rates for the wealthiest should also be extended.

"It's not that we want to punish wealthy people," said Democratic Senator Charles Schumer, who had proposed extending the tax rates for those earning up to $1 million. "But they are doing fine and they are not going to spend the money and stimulate the economy."

No Republicans backed the Democratic proposals, and a few Democrats voted against them.

Meanwhile, President Barack Obama says he's ready "to roll up my sleeves" and work with congressional leaders on a tax cut deal before rates are set to rise on Jan. 1.

The president isn't happy that Senate Republicans earlier Saturday blocked legislation. But Obama said "we need to get this resolved and I'm confident we can do it."

Obama said lawmakers must give the American people "the peace of mind that their taxes will not go up" come the new year. He says that will require compromise by both sides.

The rare Saturday votes were expected to fail, but Democrats wanted to show that they didn't support an extension of the lower rates for higher income individuals.

Republicans said the votes were a waste of time.

"The American people don't want a political dog and pony show," Republican Senator Charles Grassley said. "The bottom line is this: Stop the tax hikes."

Earlier, Vice President Joe Biden earlier urged lawmakers to back the plan.

Biden, delivering the weekly White House radio and Internet address because Obama was flying home from Afghanistan, framed the issue as Democrats sticking up for the middle-class while Republicans protected richer Americans.

"I just don't agree with the folks who've said we can't afford a lifeline for Americans who lost their jobs during the worst recession in generations, but we can afford to borrow hundreds of billions of dollars to extend tax cuts for the wealthiest two percent," he said.

The votes came two days after the House of Representatives passed an extension of the lower tax rates on individual income up to $200,000. Democrats currently control both chambers but have a larger majority in the House.

All the lower tax rates enacted under former President George W. Bush in 2001 and 2003 will expire at the end of 2010 if Congress does not take action.

http://www.msnbc.msn.com/id/40504582/ns/politics-capitol_hill/