Senate Advances Obama's $858 Billion Extension of Bush-Era Income Tax Cuts
Senator Robert Menendez talks with reporters outside the Senate Chamber after voting for the cloture vote on the Tax Compromise bill. Photographer: Win McNamee/Getty Images
Dec. 13 (Bloomberg) -- Larry Haas of the Fiscal Times, discusses the outlook for the tax-cut compromise between President Barack Obama and Republicans and the implications for the economy. (This report is an excerpt of the full interview. Source: Bloomberg)
Dec. 13 (Bloomberg) -- Enough U.S. senators vote to advance an $858 billion tax-cut compromise between President Barack Obama and Republicans. More than 60 senators voted to move the measure, clearing the way for final passage of the bill as early as tomorrow. Bloomberg's Lizzie O'Leary reports. (Source: Bloomberg)
New Jersey Senator Robert Menendez. Photographer: Brendan Smialowski/Bloomberg
The U.S. Senate advanced President Barack Obama’s $858 billion agreement with Republicans to extend all Bush-era income-tax cuts, and Senate passage may come as soon as today.
The 83-15 vote yesterday had widespread support from members of both political parties. The vote was held open for several hours to allow lawmakers time to return to Washington.
Jim Manley, a spokesman for Senate Majority Leader Harry Reid, said yesterday that the timetable for a vote was uncertain though he hoped “we can negotiate something that doesn’t require us to be here” late today. He said there was no word on whether amendments would be offered.
Obama, speaking at the White House, congratulated the Senate on moving forward and said the “bill does some very good things” for the economy. He urged the House to act quickly. “The nature of compromise” is “sacrificing something that each of us cares about to move forward on what matters to all of us,” the president said.
The legislation would extend all expiring income-tax reductions through 2012, cut payroll taxes by 2 percentage points during 2011 and extend expanded unemployment benefits through 2011. It would let companies write off 100 percent of their capital investments through 2011 and would revive dozens of business tax breaks that expired in 2009.
Treasury Secretary Timothy Geithner said in a statement that such provisions have “the greatest capacity to put more Americans back to work and strengthen the recovery.”
‘Critical Provisions’
“If we fail to extend these critical provisions, we place our economy at risk,” said Montana Senator Max Baucus, the Democratic chairman of the tax-writing Finance Committee. “If we fail to act, we place middle-class families at risk. Plain and simple, this bipartisan compromise is about creating jobs.”
Democrats voting no were Jeff Bingaman of New Mexico, Sherrod Brown of Ohio, Russell Feingold of Wisconsin, Kirsten Gillibrand of New York, Kay Hagan of North Carolina, Frank Lautenberg of New Jersey, Patrick Leahy of Vermont, Carl Levin of Michigan, and Mark Udall of Colorado. Senator Bernard Sanders of Vermont, an independent who caucuses with Democrats and spoke for more than eight hours on the Senate floor Dec. 10 against the bill, also voted no.
Republican Senators John Ensign of Nevada, Tom Coburn of Oklahoma, George Voinovich of Ohio, Jim DeMint of South Carolina and Jeff Sessions of Alabama voted no. Democrats Ron Wyden and Jeff Merkley of Oregon didn’t vote.
After Senate passage the measure would head to the House, where it faces a less certain outcome in part because many Democrats oppose a provision to set the lowest federal estate tax in 80 years.
House Vote
House Democratic leaders, who weren’t involved in final negotiations that led to the agreement Obama announced Dec. 6, say they oppose the bill without changes. House Speaker Nancy Pelosi yesterday met with her leadership team to determine how to proceed when the Senate passes its version.
“We are discussing all the options but it’s pretty clear that the Senate bill -- at least in its current form -- is unacceptable to the great majority of Democrats,” Maryland Representative Chris Van Hollen, assistant to the speaker, told reporters yesterday.
Many House Democrats argue against extending the tax cuts enacted in 2001 and 2003 for annual income exceeding $200,000 for individuals and $250,000 for married couples, a provision Obama also had opposed.
A number of House Democrats also oppose the measure’s estate-tax provision, which would set a top tax rate of 35 percent, to be applied after an individual exemption of $5 million, through 2012.
“There is a clear feeling that part is excessive,” California Representative Xavier Becerra, another member of Pelosi’s leadership team, told reporters.
Estate Tax
There was no estate tax this year, although it was replaced by a capital-gains tax on sales of some inherited assets. Without any change in law, the exemption will be $1 million on Jan. 1 and the top rate will be 55 percent.
Any changes made by the House would require another Senate vote, and Senate Republicans who negotiated with the Obama administration said such changes would endanger the agreement.
Business groups including the National Retail Federation, National Association of Manufacturers and the U.S. Chamber of Commerce urged passage. They said the tax-rate extension will prevent consumer demand from dropping and will provide certainty for future business investment.
No comments:
Post a Comment