–After Rejecting Three Amendments, Senate Easily Clears Tax Cut Bill
–Senate Passes Bill, 81 to 19
–House Democrats Trying To Decide If They Will Try To Alter Bill

By John Shaw

WASHINGTON (MNI) – The Senate approved Wednesday the $858 billion
tax cut and spending package that was negotiated by President Obama and
congressional Republicans.

The Senate approved the bill on a 81 to 19 vote, sending it to the
House for its consideration. The House tax cut vote is likely to be held
Thursday or Friday.

Before moving to final passage, the Senate voted on and rejected
three motions: a motion by Republican senator Tom Coburn to require that
the unemployment benefits be offset with other spending cuts, a motion
by Republican senator Jim Demint that would permanently extend the Bush
era tax cuts and repeal estate tax and the AMT, and a motion by
independent senator Bernie Sanders to only extend middle class tax cuts.

After these three votes, the Senate moved to final passage on the
bill.

The Senate bill is based on the agreement that President Obama
reached with Republican leaders last week. It extends all of the Bush
era tax cuts for two years and extends unemployment insurance benefits
for 13 months. It includes the extension of a host of expiring or
expired tax credits, including business tax expensing provisions that
are designed to spur growth.

The agreement provides for a 2 percentage point reduction in the
employee share of payroll taxes in 2011.

The agreement also sets the estate tax at 35% above a $5 million
per person threshold.

Of the bill’s $858 billion cost, about $364 billion is spent on
extending the Bush tax cuts of 2001 and 2003, $137 billion is for AMT
relief, $111 billion for the payroll tax holiday, $68 billion for the
estate tax changes, and $56 billion for the unemployment insurance
extension.

Now that the Senate has passed the tax cut bill, action shifts to
the House.

House Majority Leader Steny Hoyer said Tuesday that there is an
“urgency” in completing work on the tax legislation this week. Hoyer
said there are provisions that Democrats don’t like, but appeared to
signal that there will not be a vigorous effort to rewrite the bill.

Congress must also pass a measure to fund the government by the end
of the week. The current stop-gap spending bill, which is funding the
government, expires Saturday.

The House passed a year-long stop gap spending bill. Senate
Democrats have drafted a $1.1 trillion omnibus spending bill that
includes all 12 of the regular spending bills for FY11.

Senate Minority Leader Mitch McConnell said Wednesday that
Republicans object to this bill and want Congress to pass a spending
bill that funds the government until early next year, rather than a
year-long bill.

Such a vote, McConnell said, would “keep the lights on” until the
next Congress convenes in early January to take up the spending bill.

** Market News International Washington Bureau: (202) 371-2121 **

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