Showdown over Bush tax cuts Wednesday

The Senate showdown over the Bush tax cuts is expected on Wednesday.

Senate Majority Leader Harry Reid (D-Nev.) filed cloture on the Senate Democrats’ tax plan Monday, which sets up a key procedural vote on the bill on Wednesday morning unless an agreement is reached with Republicans for an earlier vote.

The Democrats’ plan would only continue existing tax rates for household income under $250,000. For the top 2 percent of earners, income above $250,000 would be taxed at a higher, 39.6 percent rate.

Two members of the Senate Democratic Caucus have said they would oppose the bill – Sens. Joe Lieberman (I-Conn.) and Sen. Jim Webb (D-Va.), both of whom are retiring after their current term. Senate Republicans have called for extending all tax rates for an additional year.

Senate Democratic leaders dropped a provision last week that would have taxed wealthy estates – an attempt to win over support from wavering senators in their caucus.

The Republican-led House is expected to vote next week to extend all expiring tax rates.