Obama-GOP tax bill clears Senate hurdle with ease

Associated Press

WASHINGTON

Far-reaching legislation to avert a Jan. 1 income-tax increase for millions won overwhelming support in a Senate test vote Monday, propelled by an uneasy and unusual alliance between the White House and lawmakers in both parties.

Eager to trumpet the 83-15 vote, President Barack Obama said even before it was announced, it proved “that both parties can, in fact, work together to grow our economy and look out for the American people.”

Senate passage of the bill is expected as early as today, and in a brief appearance at the White House, Obama called on the House to follow suit quickly. He spoke amid indications that a revolt among House Democratic liberals was ebbing.

The legislation would provide a two-year reprieve in the tax increases scheduled to take effect Jan. 1 at all income levels, reduce Social Security taxes for every wage earner in 2011 and extend an expiring program of jobless benefits for the long-term unemployed.

It also includes a scaled- back estate tax that Republicans support and has become a source of Democrats’ discontent. The bill’s overall cost, estimated at $858 billion over two years, would be added to already huge federal deficits.

The legislation presents a postelection reach across party lines after two years of gridlock. Republicans wanted a permanent extension of all the tax cuts enacted when George W. Bush was president, while Democrats insisted rates be permitted to rise on incomes over $200,000 for individuals and $250,000 for couples.

In his remarks, Obama gave no indication he was willing to accept further changes to the plan he negotiated with senior Republicans.

“I understand those concerns,” he said of objections from some of his usual allies in Congress. “I share some of them. But that’s the nature of compromise, sacrificing something that each of us cares about to move forward on what matters to all of us.”

The remarks were directed largely at Democratic critics who last week vowed to prevent the bill from coming to the floor unless it was changed to scale back the billions in relief ticketed to the wealthy.

But with lawmakers eager to adjourn for the year, officials said that demand appeared to be fading. Under discussion is an alternative approach that would bring the bill up for debate as drafted, with opponents of the estate-tax provision given a chance to change it if they can gain the necessary votes.

Despite strong criticism from fellow Democrats, Obama has made passage of the bill a key year-end priority, calling it essential for the economy as it struggles to recover from the worst recession in decades.