–Senate Majority Leader Says New $118 Billion Package Must Be Passed
–Sen. Reid: ‘We Have To Do Something Today, Tomorrow At The Latest’
–Sen. Reid: Need Tax Extenders, UI Extension, Doc Fix Now
–Senate Minority Leader: Revised Bill Would Boost Defict By $50B

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid Thursday said
it’s imperative the Senate passed a revised $118 billion tax cut and
benefit expansion bill this week.

“We’re in very perilous times,” Reid said in remarks on the Senate
floor.

“We have to do something today, tomorrow at the latest … . It’s
essential we get something done,” he added.

Reid and Senate Finance Committee Chairman Max Baucus have
redrafted their $140 billion tax cut and benefit expansion bill,
trimming its cost to $118 billion.

The underlying bill would extend about a dozen tax cuts that
expired at the end of last year, expand unemployment benefits, offer
assistance to states for Medicaid programs and provide an extension of
current Medicare payments for doctors, the so-called “doc fix,” through
Nov. 30, 2010.

Senate Democrats also eased a tax hike on the carried interest
earned by venture capitalists, real estate investors and private equity
managers.

Under a House version of the bill, 25% of carried interest would be
treated as capital gains, as it is now, and 75% would be taxed as
ordinary income, which is taxed at a higher rate. The Senate bill kept
that ratio for most assets. But it softens that tax by creating a 50-50
split for carried interest on assets held for at least five years.

Reid said the Senate will vote Thursday on several amendments, but
is hoping the matter can be resolved in the next few days. He said the
Senate has spent about seven weeks this year on some version of the tax
extenders bill.

Speaking after Reid, Senate Minority Leader Mitch McConnell said
that new version of the bill is still too costly and would boost the
deficit by $50 billion over a decade.

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

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