Wednesday, 15 December 2010

Senate Extends Tax Cuts, House Vote Expected Today

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CapitolThe United States Senate voted today to approve the legislation that will temporarily extend the Bush-era tax cuts to all Americans. The 81-19 vote took place two days after Monday’s Senate cloture vote of 83-15, which ultimately ended the Republican filibuster and moved the bill to a final vote. The cloture vote allowed for an additional 30 hours of debate on the legislation, ultimately delaying the final vote on the legislation until today at approximately 1 p.m.

Prior to today’s final vote, a number of amendments required a vote. One such amendment was proposed by Senator Tom Coburn., which would have reduced the cost of the $858 billion plan by denying unemployment benefits to millions. The amendment failed by a vote of 47-52.

Also requiring a vote was Senator Jim DeMint’s amendment, which proposed a permanent extension of all tax cuts. The vote failed, 37-63.

Finally, prior to the final vote on the tax cut, Senators voted on Senator Bernie Sanders’ amendment, which limited the tax cuts to the bottom 98 percent of earners. The vote on that amendment failed as well, 43-57.

The tax cut legislation will extend all of the Bush-era income tax rates for another two years, set the estate tax with a $5 million per-person and $10 million per-couple exemption and 35 percent top rate, maintain jobless benefits for an additional 13 months, and provide a one-year 2 payroll tax cut of two percentage points to most American workers. It also includes a number of additional tax breaks for families and businesses.

The bill now moves to the House for debate and a vote, which The Hill predicts could take place as early as today. “The bill will go before the House Rules Committee before going to the floor sometime in late afternoon or early this evening.”

However, the bill is expected to face staunch opposition in the House of Representatives, on both sides of the aisle. Last week, House Democrats approved a non-binding resolution that asserts they would not allow the bill to come to the House floor. Since then, however, fierce urgings from the President has helped to change the position of House Democrats.

Likewise, Fox News reports, “A growing chorus of conservative criticism is prompting some House members to rethink the $850 billion package of tax cuts and extended jobless benefits that President Barack Obama negotiated with top Republicans in Congress.”

Fox News predicts that the attacks will ultimately not prevent passage in the House, but that they “underscore the difficulty of building centrist coalitions after an election in which tea party conservatives ousted many Democrats and some veteran Republicans who were seen as too willing to compromise with opponents.”

However, the bill is expected to face some tweaks in the House of Representatives, most notably with regards to the estate tax. Senior Democrats have indicated that they want to see the exemption on individual estates worth as much as $5 million from taxation to be reduced to $3.5 million. They also hope to see a stiffer tax on larger estates, setting the rate at 45 percent instead of 35 percent.

In the end, House Majority Leader Steny Hoyer told reporters that while “significant concerns” remain, an “overwhelming majority” of both Republican and Democratic lawmakers understand it is “absolutely essential” to approve the bill.

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