Senate Democrats seek to drive wedge between business and Republicans

By Alexander Bolton -
The Hilee
08/19/11 12:33 PM ET

Senate Democrats, who are desperate to stimulate the economy but don’t have the money to pass traditional stimulus legislation, will turn to cutting business taxes when they return to Washington this fall.

In doing so, they will try to drive a wedge between business interests and the GOP leadership, who has tried to block almost every element of the Democratic agenda, by pushing a round of corporate tax breaks, say Senate Democratic aides.

The strategy has appeal on two grounds.

The legislation would stimulate the economy at a time when many economists argue the government must step in to revive demand despite it not being politically feasible to pass traditional infrastructure spending bills. It would also force Republican leaders to either endorse the Democratic agenda or block proposals that are popular among corporate leaders and domestic manufacturers.

But the plan is not without pitfalls. Democratic leaders could find centrists and liberals within their caucus divided over how to structure the tax cuts and whether they must be paired with infrastructure spending programs, as some liberals might demand.

(More here.)