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House Democrats consider amendments to estate tax

15 December 2010 04:53 (UTC +04:00)

Baku-APA. As the Senate prepared Tuesday to push through a sweeping tax package negotiated by the White House and congressional Republicans, liberal Democrats were laying plans to unravel the deal in the House by changing the terms of a provision that would revive the federal estate tax, APA reports quoting The Washington Post.
Senate leaders, meanwhile, postponed a vote on the $858 billion package until Wednesday afternoon. Despite the delay, the measure was expected to sail through the Senate with even stronger support than it received in a test vote this week, when 83 senators voted to advance the package in the strongest bipartisan vote on a major initiative since President Obama took office.
The measure would extend for two years an array of tax breaks enacted during the George W. Bush administration that are set to expire Dec. 31, including benefits championed by Republicans for the wealthiest households. In return, Obama secured another year of emergency jobless benefits and fresh incentives to boost the economy, including a two-percentage-point reduction in the payroll tax for all workers in 2011.
Sen. Sherrod Brown (D-Ohio) said he was leaning toward voting for the package after voting against it Monday "to send a message to the House that there are allies here." Brown, one of the Senate’s most liberal members who is up for reelection in 2012, said he changed his mind after speaking with his minister and reading letters from constituents who are struggling to find jobs in his hard-hit home state.
The strong Senate vote also appeared to be weakening resolve among House Democrats to block the measure. Senior Democrats said the House is likely to stage votes to amend the estate tax and possibly other provisions to assuage anger among the Democratic rank and file over what they viewed as an overly generous deal for the wealthy. But it was not clear that such amendments would pass.
House Majority Leader Steny H. Hoyer (D-Md.) told reporters that although "significant concerns" remain about the deal, the "overwhelming majority" of lawmakers in both parties think it’s "absolutely essential" to approve a measure to prevent tax rates from rising across the board next year.
"The vote in the Senate indicates the urgency that is felt by a broad spectrum that the middle-income taxes not be increased come January 1. In order to effect that, you’ve got to pass a bill," Hoyer said, adding that there’s "strong support for moving ahead."
The White House also expressed optimism, as Obama worked the phones to build support among House lawmakers.
"The president has had some good conversations. And I think we are on a path toward getting this agreement through the House and ultimately to the president’s desk," said White House press secretary Robert Gibbs, adding that polls show the package has "broad bipartisan support . . . not just in the Senate, but with the American people."
House Democrats met into the evening outlining a strategy that focused increasingly on the estate tax. Outraged by the agreement to exempt individual estates worth as much as $5 million from taxation, senior House Democrats said they would press to lower the threshold to $3.5 million when the measure reaches the House floor this week. They also want to impose a stiffer tax on larger estates, by setting the rate at 45 percent rather than the 35 percent demanded by Republicans and agreed to by Obama.
The higher tax would hit about 6,600 of the nation’s wealthiest households over the next two years, Democrats said, while raising an additional $26 billion that could be used to reduce the soaring national debt.
"There’s a real debate here between Republican proponents of tax cuts for the very richest Americans and our argument that that’s fiscally irresponsible and unfair to future generations," said Rep. Peter Welch (D-Vt.), who was leading the effort to strip the package of what he called "indiscriminate giveaways" for the wealthy.
As liberals complained, a growing chorus of conservatives also criticized the tax package, particularly its failure to permanently extend the Bush-era cuts. However, Americans for Tax Reform, an anti-tax group led by GOP activist Grover Norquist, endorsed the deal Tuesday, and House Republican aides said they expected no more than 20 GOP lawmakers to vote against it.
Democrats were also giving the package a second look, Hoyer said, noting that "there are some very good things in it from the perspective of growing the economy, reaching out to people who are unemployed and giving them some additional help. . . . There are a lot of things in there that are going to help middle-income families in a tough economy. So people have to weigh that."
Senate leaders said Tuesday that as soon as the Senate finishes the tax bill, they will take up a new U.S.-Russian nuclear arms treaty that is one of Obama’s top priorities. "The time has come that we have to start voting," said Majority Leader Harry M. Reid (D-Nev).
Administration officials said they had secured the 67 votes needed for Senate ratification. But Sen. Jon Kyl (Ariz), the second-ranking Republican, disagreed, saying that he "would discourage them" from trying to ratify the treaty before the Christmas break.
At least nine Republican votes would be needed to pass the New START agreement.