Congress at midnight Thursday approved an $801 billion package of tax cuts and $57 billion for extended unemployment insurance. The vote sealed the first major deal between President Obama and Congressional Republicans as Democrats put aside their objections and bowed to the realignment of power brought about by their crushing election losses.
The bipartisan support for the tax deal also underscored the urgency felt by the administration and by lawmakers in both parties to prop up the still-struggling economy and to prevent an across-the-board tax increase that was set to occur if the rates enacted under President George W. Bush had expired, as scheduled, at the end of the month.
Administration officials said Mr. Obama would sign the package into law on Friday.
The final vote in the House was 277 to 148 after liberal Democrats failed in one last bid to change an estate-tax provision in the bill that they said was too generous to the wealthiest Americans and that the administration agreed to in a concession to Republicans. The amendment failed, 233 to 194.
Supporting the overall measure were 139 Democrats and 138 Republicans; opposed were 112 Democrats and 36 Republicans.
The bill extends for two years all of the Bush-era tax rates and provides a one-year payroll tax cut for most American workers, delivering what economists predict will be a needed lift. The Senate approved the package on Wednesday by 81 to 19.
The White House and Republicans hailed the deal as a rare bipartisan achievement and a prototype for future hard-bargained compromises in the new era of divided government.
(Source: NY Times)
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4 Responses
Gimme a break!! This is an outright LIE! There is NO tax cut, this is an EXTENSION of EXISTING tax RATES. In fact they are paying people NOT to work for AN ADDITIONAL THIRTEEN MONTHS, which makes it a SPENDING BILL.
Again, if according to the Constitution spending bills are to begin in the House before going to the Senate, I don’t see how this is Constitutionally legal.
Estate tax yea the liberals even want to tax the cemetery as you lay there. They will call it a resting tax.
I think all of us will enjoy the tax breaks. However, the price tag is totally insane. To put the short term cost of $858 billion into perspective, President Obama’s proposal to freeze the federal civilian payroll for 2 years will save the government only around $60 billion over a 10-year period.
#1 is wrong; there is an additional temporary tax cut in the form of a reduction of the social security payroll tax.
And because the Senate version was an the form of an amendment to a previously passed House bill, there is a no constitutional problem.
I really wish people would do their research before commenting here.
#2,
The Estate Tax is a actually a HUGE tax break. Here is how it works:
I buy an asset for 1 million dollars. When I die and leave it to my son it is worth 2 million dollars. He pays no tax because it is below the estate tax threshold. He sells it later for 3 million and pays tax only on the difference between the 3 million and the 2 million because the difference between the 2 million and the 1 million was subject to the estate tax (it just fell below the threshold).
That is if I die in 2011. However, if I die in 2010 the rules are different. Because there is no estate tax, my son would have to pay capital gains tax on the entire difference between the 3 million and the 1 million! I would have been happy to keep the 2010 status quo.