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Tax-Cut Compromise Clears Senate Hurdle; Vote Expected This Week

3 years ago
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Despite the objections of liberals and some conservatives, the Senate voted 83 to 15 Monday to begin the final debate on the tax-cut compromise struck between President Obama and Republican leaders last week. Among the coalition to vote no were liberal Sens. Russ Feingold (D-Wis.), Bernie Sanders (I-Vt.), and Sherrod Brown (D-Ohio), as well as conservative Republican Sens. Jim DeMint of South Carolina, Oklahoma's Tom Coburn and John Ensign of Nevada.

On the table was the legislation that Senate Majority Leader Harry Reid released late Thursday night, a massive package of extensions, cuts and increases to 2010 tax rates. As the president outlined last week, the bulk of the bill is dedicated to extending the expiring Bush tax cuts for all income levels for the next two years.

Monday evening, President Obama met briefly with reporters, taking no questions but urging the House to act quickly on the package.

In addition to extending the tax cuts, the deal also temporarily cuts the 6.2 percent payroll tax to 4.2 percent for all workers and extends unemployment benefits for 13 months for Americans out of work up to 99 weeks. Most objectionable to liberal Democrats, the bill also sets the estate tax at 35 percent for estates valued at more than $5 million, well below the 45 percent rate on estates over $3.5 million that most Democrats had been pushing for.

Senate Minority Leader Mitch McConnell negotiated the package with President Obama last week and called it a step in the right direction, but only a first step. He also explained to senators Monday afternoon that the vote was just the beginning of a Republican effort to shrink the size of the federal government.

"This bipartisan compromise represents an essential first step in tackling the debt -- because in keeping taxes where they are, we are officially cutting off the spigot. And until we did that, Democrats in Washington were never going to be serious about cutting spending or debt," McConnell said.

Sen. Max Baucus, chairman of the Senate Finance Committee, led a group of moderate Democrats who also voted for the bill, despite what they said were misgivings about the deal, out of worry that a lengthy standoff with Republicans would end up raising taxes on the middle class in January.

"While I strongly prefer acting in a way that focuses on the middle class, that focuses on creating jobs, and that gets us the most bang for our buck, inaction is not an option," Baucus said.

The bulk of the opposition to the compromise came from liberals, including Sen. Bernie Sanders, who has argued for a week that softening the effects of the estate tax and continuing the Bush tax cuts for the wealthy would be blatantly unfair.

Colorado's Sen. Udall also voted against the bill, but said his chief concern is over the effect the $900 billion in lost tax revenue will have on the ballooning deficit. Before the vote, he slammed the "irresponsible tax deal for wealthy Americans" and called the entire package "a step too far."

"I feel like we're operating in some kind of a parallel universe," he said.

Many of those who voted for the bill on Monday voiced their opposition to parts of it before supporting it. Sen. John McCain complained about the dozens of tax credits tacked onto the bill, which he called "unneeded, unnecessary, unwanted sweeteners."

"These credits are a form of special interest spending in the tax code, which is precisely the sort of business-as-usual behavior that Republicans told tea party voters they would not engage in," McCain said. "I'll vote for it, but it's not what the people said they wanted on Nov. 2nd."

Now that the Senate has voted to end debate, Senate Majority Leader Reid will schedule a final vote on the measure later this week, when senators are expected to approve it overwhelmingly. The it will head to the House of Representatives, where the bill will get a big dose of liberal opposition.

"I think the entire House of Representatives on the Democratic side has said we're not going for this deal," Rep. Anthony Weiner (D-N.Y.) said on NBC's "Meet the Press." "We're going to change this and hopefully the president's going to back us up as we try to take out the worst things that are in it."

Despite a clear message from Vice President Joe Biden to House Democrats last week that the compromise will not be changed, Speaker Nancy Pelosi defiantly indicated Thursday that she and her caucus are still working to modify the deal. She also said she had no immediate plans to bring the bill to the House floor until it's more palatable to her caucus.

House Majority Leader Steny Hoyer acknowledged the hostility to the package from some members of his caucus on Monday, but he told reporters at the National Press Club that passing the bill is probably inevitable. He would not, however, commit to passing a bill identical to the Senate-approved version.

"I think we're going to have a vote on the Senate bill, with possible changes," Hoyer said. "We may have it with amendments. We'll see what the process is," he said. "I think we will pass a bill."

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