In the first test of support for a package of tax cuts and jobless benefits negotiated by President Obama, the Senate on Monday secured far more than the 60 votes needed to advance the measure despite protests from the political left that the package is too generous to the wealthy and complaints from just about everyone that its overall price tag is too high. The chamber voted 83-15 to open debate on the legislation, which Obama said he negotiated with congressional Republicans to boost the economy.
The Senate is expected to pass the measure Tuesday and send it to the House, where Democrats have a much larger liberal faction — more than 80 lawmakers — that has pledged to modify the legislation to eliminate tax breaks for the rich.
Recommended Stories
The package would extend Bush-era tax cuts, set to expire at year’s end, to all income levels and provide an additional 13 months of unemployment insurance to millions of out-of-work Americans. It includes dozens of other tax breaks, including a research-and-development tax credit and a 2 percent reduction in payroll tax paid by workers. It also includes “sweeteners” aimed at attracting Republican and Democratic votes, including a $5 billion subsidy for corn-based ethanol.
The total price of the package is $893 billion, according to the Congressional Budget Office, all of which will be added to the federal government’s budget deficit.
Sen. John McCain, R-Ariz., voted for the bill, but railed against it first, saying it was loaded with wasteful spending, including the ethanol subsidies that he dubbed “the Hawkeye handout” in reference to Iowa Sens. Charles Grassley and Tom Harkin, who wanted the provision included and who voted for the tax cut package.
“I’ll vote for this, but it’s not what the people said they wanted done on Nov. 2,” McCain said, referring to the congressional elections dominated by an electorate angry over Washington’s freewheel spending.
House Majority Leader Steny Hoyer, D-Md., said Monday that he expects the House to pass the bill, “as opposed to not passing anything,” but he said lawmakers may first try to amend it.
“I think a number of us would like to change it,” Hoyer said. “I know a lot of us believe that there is a compromise available, but we’ll have to see where the votes lie.”
House Democrats are particularly angered by a provision that would lower the estate tax from 45 percent to 35 percent and increase the threshold for those who must pay it, from $3.5 million to $5 million for individuals and from the current $7 million for couples to $10 million.
Republicans, however, said that any effort to increase the estate tax would jeopardize the entire bill and Democrats appear to be heeding that warning.
“If we fail to extend these critical provisions, we place the economy at risk,” Senate Finance Committee Chairman Max Baucus, D-Mont., said. “If we fail to act, we place middle-class families at risk.”
Sen. Mark Udall, D-Colo., was among those voting against the bill, saying the extension of tax cuts for the wealthiest taxpayers would drive up the deficit just as Congress appears to be getting serious about reducing spending.
“I feel like we are operating in some kind of parallel universe,” Udall said.
