By Kim Dixon
WASHINGTON (Reuters) - The top U.S. Senate Democrat said on Thursday that politically vulnerable lawmakers will be "just fine" if they back President Barack Obama's plan to extend tax cuts only for households making $250,000 or less, a vote that could be perilous for some facing re-election in November.
Democratic Senate Majority Leader Harry Reid's remarks to reporters came as he tried to steer Obama's initiative -- a centerpiece of the president's re-election campaign -- to Senate passage by the end of this month.
"Ninety-eight percent of the American people will get a tax cut," Reid said. "My senators are going to be doing just fine."
Even if it passes the Senate, the tax bill is sure to die in the House of Representatives, where Republicans who control that chamber want to renew all Bush-era tax cuts that are set to expire on December 31, including those for the wealthiest.
The vote, like one cast in the House on Wednesday to repeal Obama's landmark healthcare law, is part of an effort by both parties to rev up their core backers ahead of the election on November 6.
At least two retiring senators, Democrat James Webb and Independent Joseph Lieberman, who is aligned with Democrats, say they have already decided to vote against Obama's plan.
But two others in tight races, Senator Jon Tester of Montana and Claire McCaskill of Missouri, suggested they would unite with their party.
Several others, mostly from states with more moderate-to-conservative constituents, have been coy about how they will vote.
Republicans want to renew all Bush-era tax cuts, including those for families earning above $250,000, and they argue that small businesses will be hurt by limiting the tax cuts.
About 3 percent of all individuals who file taxes as businesses would see higher tax rates under the proposal, though half of the income earned by this group would see a hit, according to the non-partisan Joint Committee on Taxation.
"For some reason (Obama's) advisors think it helps him to take more money away from small already-struggling business owners in this country and spend it on more government," said Republican Senate Minority Leader Mitch McConnell.
"I don't think anything is going to get done before the election because of excessive partisanship," said Florida Democratic Senator Bill Nelson, who faces re-election this year.
One line of fracture among Democrats is the threshold for defining who gets the cuts. Several Democrats, including Nelson, back extending the cuts to households making up to $1 million.
Reid expressed confidence he would get a majority.
"One of the things I'm pretty good at around here is counting votes," Reid said.
CHANCE TO RETAKE SENATE
Republicans will likely continue to use the issue against Democrats in tight races to paint them as risking the economic recovery by raising taxes. With 23 Senate Democrats facing re-election on November 6, compared to only 10 Republicans, the fate of the closely divided Senate is up for grabs.
Five of the races are called "pure toss-ups" by the non-partisan Rothenberg Political Report.
Jessica Taylor of Rothenberg said senators in tough races will think long and hard about whether to vote to renew all tax cuts.
"They are going to be very cautious to explain what they are doing," Taylor said. "There are a lot of fluid races and senators in them will be the ones to watch."
While Americans generally oppose tax hikes, polls show most favor higher taxes on the very wealthy.
One Democrat in a tight race, Montana's Tester, is planning to vote for the legislation, according to an aide.
Missouri Senator McCaskill is fighting a tough re-election battle, and has been careful with her statements.
"I fully support extending tax cuts for middle class families making less than $250,000," McCaskill said in a statement provided by her office.
She then added that she is open to extending tax cuts for families that earn up to a $1 million if it is part of debt reduction package.
Not all lawmakers in the tightest races have gotten on board though.
Democratic Senator Joe Manchin is up for re-election in West Virginia, and after winning only 53 percent of the vote in a special election in 2010, his seat is now called relatively safe by political analysts.
Still, the conservative Democrat is non-committal.
"I've very much committed to the big deal," to tackle deficits and tax reform, he said, without indicating whether he would vote for Reid's legislation.
Another conservative Democrat, Senator Jim Webb, said he does not want any taxes raised this year, though he is not running for re-election. "That's a no," when asked if he would vote for the Reid proposal.
In addition to expiration of the individual tax rates, current tax rates on dividends, capital gains and the estate tax also all expire on December 31.
(Reporting By Kim Dixon, Thomas Ferraro, Donna Smith and Richard Cowan. Editing by Fred Barbash and Cynthia Osterman)
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