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Dispatches from public radio's correspondent at the Oregon Legislature. This is a venue for political and policy coverage of the state government in Salem and its impact on the people of Oregon.

Tax Measure Fails, Democrats Table Pension Cut

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It was dubbed the "Grand Bargain." But the carefully crafted deal to raise taxes and cut public pensions crashed and burned in the Oregon legislature Tuesday. 

And it means that lawmakers will likely work through the Fourth of July holiday.

Here's how it was supposed to work: Republicans hold their noses and vote for a tax increase. Then, Democrats hold their noses and vote to cut pensions for retired public workers. Both sides would agree to vote for something they didn’t like in order to get something they wanted.

But that's not how it happened.

After only one GOP Senator joined majority Democrats to support the plan, Senate President Peter Courtney's gavel signaled the bill’s defeat as he announced, "House Bill 2456-B, having failed to receive the required three-fifths majority, has been defeated."

That outcome became clear in the debate leading up to the vote. Republicans criticized Democrats for leaving out a tax cut for small businesses.

But Democratic Senator Mark Hass said there was just no way to please everybody. "It is not perfect. But you all know that perfect bills rarely go anywhere in this building. There's a graveyard of perfect bills right outside this chamber, and I have plenty of mine buried there."

Republicans bristled anytime Democrats referred to the package as a bargain or a compromise. The GOP's Tim Knopp said the term that's been circulating around the capitol just wasn't accurate. "When people start referring to this as a 'grand bargain,' I think we need to clarify. This is not a grand bargain. This is a grand ultimatum. A grand bargain would include things that both parties wanted."

When the tax hike fell one vote short, Democrats responded by blocking a vote on the public pension portion of the package. It would have gone even further than a cost saving measure passed earlier this year.

Public employee unions are already threatening to sue to overturn those cuts to cost of living increases to public sector retirees.