Senate Passes Obama Tax Deal
WASHINGTON – The U.S. Senate voted to prevent a Jan. 1 income tax increase for millions and to renew jobless benefits for the long-term unemployed Wednesday with support from most of the senators from West Virginia and Ohio.
The retiring George Voinovich, R-Ohio – who gave his farewell speech on the Senate floor Wednesday – opposed the legislation, while support came from Democrats Sherrod Brown of Ohio and Jay Rockefeller and Joe Manchin of West Virginia.
A House vote is expected today.
At its core, the legislation provides a two-year extension of the tax cuts at all income levels that Congress approved while George W. Bush was president. Without action, they will expire Dec. 31.
The bill also would cut 2011 Social Security taxes for all wage earners, a reduction that will mean an extra $1,000 in take home pay for an individual earning $50,000.
In addition, the legislation renews a program of jobless benefits for millions who were laid off more than six months ago. Officials said without the bill, government checks will be cut off for 2 million Americans over the holidays, and millions more over the next year.
Energy tax provisions, including extension of a government subsidy for ethanol and breaks for producers of other alternatives to oil, were added in recent days to strengthen lawmakers’ support for the measure.
Despite vocal opposition by liberals, the legislation passed by a vote of 81-19.
Brown had been among Democrats opposed to extending the tax cuts to the wealthiest Americans with incomes over $1 million annually, but noted he voted “yes” to maintain across-the-board tax cuts to help working class citizens.
“Republican senators have held middle class tax cuts and unemployment insurance hostage to extort bonus tax cuts for millionaires and billionaires,” Brown said Wednesday. “The package is far too generous to the wealthiest 2 percent of Americans, particularly when you consider that Republican senators blocked a cost-of-living increase for seniors on Social Security and thwarted efforts to spur economic growth in the Midwest through clean energy production.”
Calls seeking comment from Rockefeller, Manchin and Voinovich were not returned Wednesday.
President Barack Obama swiftly urged the House to pass the $858 billion bill without changes.
At the insistence of Republicans, the plan includes a more generous estate tax provision: The first $10 million of a couple’s estate could pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
The lower estate tax infuriated some Democrats who were already unhappy with Obama for agreeing to extend tax cuts for individuals making more than $200,000 and couples making more than $250,000.
The estate tax was repealed for 2010. But under current law, it is scheduled to return next year with a top rate of 55 percent on the portion of estates above $1 million – $2 million for couples.
House Democratic leaders want to bring back the 2009 estate tax levels. That year, individuals could pass $3.5 million to their heirs, tax-free. Couples could pass $7 million, with a little tax planning, and the balance was taxed at a top rate of 45 percent.