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Friday, December 10, 2010

The Obama predicts tax bill passage,with possible changes

President Barack Obama is predicting congressional sanction of the tax-cutting compromise he has reached with Republican leaders, but he is not decision out that unhappy congressional Democrats will make some changes in the enormous legislation.

In an interview with NPR released Friday, Obama said that regardless of a rebellion by many Democrats against his tax deal, it will pass because "nobody — Democrat or Republican — wants to see people's paychecks smaller on Jan. 1 because Congress did not act."

The deal would extend cuts in income tax rates for all earners that would otherwise expire next month, renew long-term jobless benefits and trim Social Security taxes for one year.

Democrats have objected that it is too kind to the rich, especially its provisions cutting estate taxes for the wealthiest Americans. House Democrats voted in a closed-door meeting Thursday not to allow the package to get to the floor for a vote without changes to scale back tax relief for the rich.

Asked about those objections, Obama said there will be talks between House and Senate leaders about the package's ultimate details.

"Keep in mind, we didn't actually write a bill. We put forward a structure. I am confident that the framework is going to give the impression of being like the one that we put forward," he said.

The measure appears headed for Senate sanction after negotiators added a few sweeteners to encourage ethanol and other forms of alternative energy.
Tax provisions designed to amplify production of hybrid automobiles, biodiesel fuel, energy-efficient homes, coal and energy-efficient household appliances would be extended through the end of 2011.

There is no precise schedule for passage in the Senate, but a test vote was set for Monday afternoon that appears likely to demonstrate overpowering support for the legislation. Supporters say it would help accelerate a lethargic recovery from recession.

"This bill is not ideal, but it provides the economic boost middle-class families and small businesses in Nevada and across America need," said Senate Majority Leader Harry Reid, D-Nev. "Middle-class families and small businesses will see their taxes go down."

At the insistence of Republicans, the measure includes a more liberal estate tax provision. That infuriated Democrats already unhappy with Obama for approving to extend tax cuts at incomes of more than $200,000 for individuals and $250,000 for couples.

In all, the package would cost about $855 billion, according to a beginning congressional estimate.

"If we pass this agreement as written, it says we are going to continue the Bush policy of trickledown economics for at least two more years, and in my mind, that is ridiculous," said Sen. Bernie Sanders, a Vermont independent.

Despite significant criticism from fellow Democrats, Obama has said the comprehensive measure is necessary to help the struggling economy recover from the worst recession in decades.

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