House OKs Obama’s tax-cut deal

WASHINGTON — The House approved President Barack Obama’s sweeping tax-cut compromise at midnight Thursday, preventing tax rates from rising Jan. 1 and sending the president a bipartisan agreement that few could have imagined in deeply polarized Washington.

The vote to accept the $858-billion Senate-passed
measure was 277-148. Now it goes to the president for his signature,
which is expected to be swift. Obama campaigned incessantly for passage
despite his opposition to extending the George W. Bush-era lower tax
rates across the board, including on family income above $250,000.

Shortly after the bill passed, Treasury Secretary Timothy F. Geithner issued a statement calling it “good for growth, good for jobs, good for
working and middle-class families, and good for businesses looking to
invest and expand their work force.”

House passage of the Senate bill cleared the way for further action this weekend. Senate Majority Leader Harry Reid, D-Nev.,
called for votes Saturday to advance a youth immigration bill known as
the DREAM Act and to advance repeal of the “don’t ask, don’t tell”
policy against gays serving openly in the military.

All day Thursday, House members struggled to reach
final passage and overcome a persistent protest from liberal lawmakers
incensed over the tax deal’s benefits for the nation’s wealthiest
earners.

Democratic leaders worked to allow liberal opponents
a way to register their objection, but wanted to avoid any change that
would send the bill back to the Senate with so little time remaining in the lame-duck Congress.

Liberal House Democrats were particularly opposed to a $68-billion provision that would reinstate the estate tax at a 35 percent rate on estates above $5 million for singles and $10 million for families.

Democrats pushed until late Thursday for a 45 percent rate, with exemptions on estates below $3.5 million for singles and $7 million for families — the rate that was in place until the tax lapsed at the end of 2009.

In the end, House leaders agreed to permit a vote on
just one amendment – on the estate tax. It failed, 233-194, with most
Republicans and several dozen Democrats voting no.

The House then approved the Senate bill, with nearly equal numbers of Democrats and Republicans supporting it.

But the debate that preceded the votes was intense.

Rep. Linda T. Sanchez, D-Calif., called the package “reckless.”

Rep. Jay Inslee, D-Wash., decried its “deja-voodoo economics.”

Rep. Eric Cantor, R-Va., urged colleagues to “put politics aside” to ensure that tax breaks set to expire Dec. 31 would continue.

The package contains a two-year extension of income
tax cuts approved during the George W. Bush administration, including
for earnings above $250,000 for families and $200,000 for individuals, along with direct aid to jobless workers and stimulus measures that Republicans largely oppose.

Dividends and capital gains would continue to
receive Bush-era tax breaks. Middle-income Americans would see a
one-year cut in payroll taxes, from 6.2 percent to 4.2 percent, that
would place up to $2,000 in workers’ pockets.

Democrats were in the uncomfortable position of
approving Bush tax cuts they had long opposed on grounds that tax
breaks for the wealthy drive up the national debt.

“I beg this body to defeat this bill,” Rep. Gene Taylor, D-Miss., said during debate, drawing applause on the House floor.

Republicans wrestled with the political reality that
the package contains the type of stimulus measures they opposed during
the midterm election campaign.

Despite grass-roots opposition to government spending, Republicans in the tax deal have agreed to renewable energy grants and $56 billion in extended unemployment benefits through 2011 for as many as 7 million jobless Americans.

“I don’t like this bill,” said Rep. David Dreier, R-Calif. “I don’t know of anyone who stood up and said they like this bill.”

Moreover, the cost of the package is neither covered
nor offset anywhere in the federal budget, adding to the national debt
at a time when a bipartisan fiscal commission has just released a stark
report on the need to rein in deficit spending.

Earlier in the evening, Reid withdrew a
trillion-dollar spending bill that had been intended to avert a
government shutdown this weekend. It became bogged down over earmarks,
with Republicans pledging to consume the rest of the Senate session debating the bill.

Instead, Reid said he would work with the GOP to offer a short-term spending bill that would fund the government into next year.

Republicans called the large spending bill bloated, even though many of the earmarks had been requested by GOP senators.

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