The Bush tax cut and unemployment benefit extension legislation passed a key procedural hurdle in the Senate on Monday, overcoming the 60-vote threshold needed to come up for a vote later in the week.
The measure advanced Monday evening by a vote of 83 to 15, with 45 Democrats and 37 Republicans voting to invoke cloture and cut off debate. A final vote on the legislation is expected on Tuesday in the Senate, and then it will be sent to the House.
The status of the $858 billion bill in the House is in question, however, as a majority of House Democrats voted in a resolution within their caucus last week to express their disapproval of the bill.
Many congressional Democrats are upset that President Obama struck a deal with Republican congressional leaders to extend the Bush-era tax rates for two years even for those earning over $250,000 a year, violating a campaign pledge. Another possible deal breaker is that the estate tax will be set at 35 percent, with a $5 million exemption for individuals, instead of the 55 percent rate for estates over $1 million that it was scheduled to return to at the beginning of next year. Democrats will try to introduce amendments to increase the estate tax and add other provisions, but Republicans have warned that they are not open to allowing many changes in the legislation.
"Once the Senate completes action on this bill, it will move over to the House of Representative for its consideration," said Obama in remarks during the Senate vote. "I’ve been talking with several members of that body. I recognize that folks on both sides of the political spectrum are unhappy with certain parts of the package, and I understand those concerns. I share some of them. But that's the nature of compromise - sacrificing something that each of us cares about to move forward on what matters to all of us. Right now, that's growing the economy and creating jobs. And nearly every economist agrees that that is what this package will do."
The bill includes some provisions that are seen as favorable trade-offs by the Obama administration, including a 13-month extension of unemployment benefits and a 2 percent cut in the Social Security payroll tax for a year, lowering the rate from 6.2 percent to 4.2 percent.
The bill also extends the Research & Experimentation Credit, the Child Tax Credit, the Earned Income Tax Credit, and the American Opportunity Tax Credit for college tuition, along with patching the alternative minimum tax to prevent it from affecting millions more taxpayers. Obama has argued that it is necessary to pass the legislation to extend tax cuts for the middle class and avoid jeopardizing the economic recovery.
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