Another Democrat Says Extend ALL Bush Tax Cuts

Sen Ben Nelson, D-Neb, on Thursday joined a growing list of Democrats that support an extension of all of the Bush-era tax cuts which are set to expire at the end of this year, including for the wealthy, a move that puts the moderate Democrat in a familiar place - against the majority of his party, including President Obama who a day earlier strongly supported an expiration of cuts for top earners.

"I support extending all of the expiring tax cuts until Nebraska's and the nation's economy is in better shape, and perhaps longer, because raising taxes in a weak economy could impair recovery," Nelson said in a statement from his office. "Continuing all of the tax cuts could provide certainty for families and businesses in Nebraska and nationwide. Today, many businesses are sitting on cash because of uncertainty, which is holding back economic development across America."

Senior Senate Democratic leadership aides have said that the party is likely to try to extend tax cuts only for middle class Americans when they return later in September, but a number are predicting that this effort will fail in the face of united GOP opposition and a splintering of the majority.

Senate Budget Committee Chairman Kent Conrad of North Dakota, a fiscal hawk whose positions can often can sway members of his caucus, has said there should be a temporary extension of cuts for the wealthy. In July, Conrad said that he would prefer to see the top brackets expire but that "as a general rule, you don't want to cut spending or raise taxes on anyone in a bad economy."

Sen. Evan Bayh, D-Ind., who is retiring this year, echoed that sentiment, as did two Democratic Senate candidates who would like to take a seat in the chamber next year, Missouri's Robin Carnahn and Kentucky's Jack Conway, both in tough races back home against fiscally conservative candidates.

But Sen. Jack Reed, D-RI, a respected member of his party and staunch Administration ally, told reporters on a conference call Thursday that the tax cuts for the wealthy should expire and that the increase in revenue could be better spent.

"There are much better ways to spend resources...than simply giving tax cuts to very wealthy Americans," Reid said, advocating that the money from the tax increase on individuals making more than $200,000 and couples making more than $250,000 should be used on a payroll tax.

Reed attempted to take the steam out of one GOP argument that a tax hike on those with the highest incomes would actually hurt small businesses, as well, who tend to file at the individual, not corporate level, saying a payroll tax would help those businesses hire more workers.

But some Democrats have insisted that any tax cuts should be paid for with spending cuts or further tax increases, something Republicans staunchly oppose.

"You simply don't raise taxes in the middle of a recession, period," Minority Leader Mitch McConnell, R-KY, told reporters back in August.

And Ben Nelson agreed. "Just like the stimulus package in 2009, it is imperative that we take actions to help the economy. I hate deficit spending, but some matters are so urgent that they can't wait.

Reed predicted that a stalemate on taxes is likely before the midterms, ruling out a temporary extension of the top rates, something economist Mark Zandi and former Obama OMB Director Peter Orszag recently advocated.