Senate Passes Tax Cut Deal
The AP reports:
The Senate Wednesday overwhelmingly passed a sweeping tax package that would save millions of Americans thousands of dollars in higher taxes while also reducing their Social Security taxes and extending jobless benefits.
The $858 billion package now goes to the House, where many Democrats are unhappy with a provision that allows estates as large as $10 million to pass to heirs tax-free. Democratic leaders, however, say they expect the bill to ultimately pass and become law.
A wide array of tax cuts enacted under President George W. Bush is scheduled to expire on Jan. 1 - just two weeks away - affecting taxpayers at every income level. The bill passed by the Senate, 81-19, would extend them for two years.
Obama urge quick action in the House.
"I know there are different aspects of this plan to which members of Congress on both sides of the aisle object. That's the nature of compromise," the president said. "But we worked to negotiate an agreement that's a win for middle-class families and a win for our economy, and we can't afford to let it fall victim to either delay or defeat."
House Democratic leaders said they expect to vote on the bill Thursday.
Obama negotiated the package with Senate Republicans, and then administration officials worked for days to persuade congressional Democrats to support it, signaling a possible blueprint for future legislation. Because of November's election victories, Republicans will take control of the House in January and gain seats in the Senate.
The bill would extend expiring tax cuts at every income level. It also would renew a program of jobless benefits for the long-term unemployed that is due to lapse, and enact a one-year cut in Social Security taxes. The bill's cost, $858 billion, would be added to the deficit.
Some Senate Republicans balked at the price tag, noting that Obama's deficit commission recently outlined the massive fiscal problems facing the nation.
"The American people are going to be looking, and they're going to say, does the Senate get it? Do they understand the severity and the urgency of the problems that face our fiscal future?" Sen. Tom Coburn, R-Okla., said Wednesday.
At the insistence of Republicans, the plan includes a more generous estate tax provision: The first $10 million of a couple's estate could pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
The lower estate tax infuriated some Democrats who were already unhappy with Obama for agreeing to extend tax cuts for individuals making more than $200,000 and couples making more than $250,000.
"This administration fights for nothing," said Rep. David Wu, D-Ore.
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