This vote was on whether to allow an amendment by John Cornyn, R-Texas, that would replace the Making Work Pay tax credit with a reduction in the lowest marginal tax rate from 10 percent to 5 percent. The Making Work Pay tax credit pays $400 to individuals earning up to $75,000 annually. The amendment was offered to a $900 billion spending bill intended to bolster the flagging economy and create jobs.
When Cornyn offered his amendment, Max Baucus, D-Mont., attempted to defeat it with a parliamentary maneuver that takes advantage of a rule barring amendments that increase the deficit. Cornyn then made a motion that that the rule be waived for his amendment, which is what this vote was on.
Cornyn said his amendment would provide tax relief to more than 105 million working Americans.
“My amendment does not add to the bill’s total. Instead, my amendment is paid for by striking the refundable Making Work Pay credit which picks winners and losers by providing relief to only a select group of taxpayers,” Cornyn said.
Baucus said Cornyn’s amendment would give a tax cut to people who pay income taxes, but then disenfranchise almost 50 million Americans who don’t pay an income tax, but do pay a payroll tax (the taxes paid on Social Security and Medicare, primarily).
“So this amendment would give a tax cut to those who pay income taxes—a modest amount—and to pay for it, it disenfranchises those 49 million, 50 million Americans who will get a tax break under this bill because they work; that is, they pay payroll tax. Those who work but who are not wealthy will spend the money more than people who are wealthier and get a tax cut. So I suggest very strongly that we do not support this amendment,” Baucus said.
By a vote of 37-60, the motion was rejected. All but three Republicans present voted for the motion. Every Democrat present voted against the motion. The end result is that the motion failed, the amendment was killed with a parliamentary maneuver, and the bill went forward without language that would have removed the Making Work Pay tax credit and replaced it with a reduction in the lowest marginal tax rate.