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Senate advances $858 billion tax-cut compromise

WASHINGTON — The Senate overwhelmingly advanced President Barack Obama's $858 billion tax-cut package Monday in a vote that heightened pressure on reluctant House Democrats and enhanced the likelihood of congressional approval for the compromise.

The Senate could send the package to the House by midweek and turn to remaining legislative priorities, including a nuclear arms reduction treaty with Russia, a repeal of the ban on openly gay military personnel and a youth immigration bill.

Still, House Democrats have yet to relent in their opposition to the tax-cut deal between the White House and GOP leaders and are expected to demand changes to the bill's estate tax provision, which liberal lawmakers charged was skewed to the wealthy.

Yet as the Senate voted 83-15 to cross a key procedural hurdle, it became increasingly clear that altering the package in either chamber could delay final votes, and put at risk other top goals before the Democratic-controlled Congress comes to a close.

Obama urged a speedy resolution. "This proves that both parties can in fact work together to grow our economy and look out for the American people," Obama said as the Senate vote was under way.

The tax breaks passed during the administration of former President George W. Bush. They expire on Dec. 31, and failure by Congress to extend them would lead to higher taxes for nearly every American worker.

Republicans watched the feud between Obama and congressional Democrats, confident they have little at stake if a resolution is not reached in the days ahead. If taxes go up on Jan. 1, Republicans are convinced the president and his party would be blamed.

Then, with a GOP majority in the House and greater numbers in the Senate, Republicans could swiftly pass their preferred tax cuts.

Sen. Mitch McConnell, R-Ky., the Senate GOP leader, said the bipartisan package underscores the new direction in Washington after the fall elections.

A Pew poll released Monday showed Americans are largely on board with the package, with 60 percent in favor and 22 percent opposed.

The package extends the Bush tax cuts for two years on families at all income levels, including the wealthiest 2 percent who have incomes above $250,000.

The package also continues unemployment insurance through 2011 for up to 7 million Americans who otherwise would see their jobless aid expire.

One key change for most taxpayers will be a new 2-point reduction in payroll tax worth up to $2,000. It replaces the so-called Making Work Pay tax cut for 95 percent of Americans, a break that expires Dec. 31.

The package also reinstates the estate tax that lapsed this year under a quirk of law.

The Senate also added $10 billion in energy assistance, including nearly $5 billion in ethanol and coal credits. But it also included an extension of grants for renewable energy developers.

The Florida vote

Both Florida senators, Democrat Bill Nelson and Republican George LeMieux, voted for passage of the measure.

Senate advances $858 billion tax-cut compromise 12/13/10 [Last modified: Monday, November 7, 2011 1:40pm]

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