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Tax Cut Bill Goes to Obama

The House voted just before midnight Thursday to send an $858 billion tax cut package that President Barack Obama negotiated with Senate Republicans to the president for his signature.

The House voted 277-148 in favor of the measure as passed by the Senate, even though the Democratic Caucus approved a nonbinding resolution last week stating that the chamber should not bring up the bill without altering it.

An attempt to change the bill’s estate tax language was rejected, 194-233, on the floor Thursday night. Many House Democrats opposed the bill’s 35 percent tax on estates of more than $5 million, and they wanted to replace it with House-passed language that would set a 45 percent tax on estates of more than $3.5 million.

The bill would extend the 2001 and 2003 Bush tax cuts for all income brackets for two years, extend unemployment benefits for 13 months, impose a payroll tax holiday, and reduce a scheduled increase in the estate tax rate and threshold.

Ultimately, House Democratic leaders brought up the unchanged bill and did not whip Members to vote for the estate tax swap. However, a rebellion in the Democratic ranks Thursday afternoon prevented the bill from being brought to the floor until late that night.

Objections from liberals forced Democratic leaders to pull the rule for floor consideration of the tax measure in the afternoon, moments before it was to be put to a vote. The liberals refused to vote for the original rule because they said it effectively forced them to back the underlying tax measure in order to swap the estate tax language.

Speaker Nancy Pelosi (Calif.) and other Democratic leaders huddled with a group of liberal Members that included Reps. Peter Welch (D-Vt.), Anthony Weiner (D-N.Y.), Jesse Jackson Jr. (D-Ill.), Peter DeFazio (D-Ore.) and Donna Edwards (D-Md.). They agreed to alter the rule to allow a separate vote on the entire tax package if the House estate language were adopted, and the move soothed enough liberals to win adoption of the rule and bring the bill to the floor.

Welch, who helped lead the fight against the bill on the floor, said he and other liberals also petitioned House leaders to allow them to offer a broader amendment. In addition to swapping the estate tax language, it would have allowed tax cuts to expire for incomes over $1 million, substituted the Making Work Pay tax credit for the payroll tax deduction and provided a one-time $250 payment to Social Security beneficiaries.

“We were arguing very aggressively that our amendment represents relief from the major problems in that bill as seen by most of the Democratic Caucus,” he said.

Welch said leaders gave the liberals a “full hearing” Thursday night, but they opted not to allow the amendment, likely for fear that it could implode the entire package.

“I think one of the problems is they were concerned about moving forward and whether considering a new amendment, including ours, would get in the way of moving forward,” he said.

Jackie Kucinich contributed to this report.

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