Wednesday, Dec. 15, 2010 | 1:14 p.m.
The Senate has passed the president’s two-year tax extension, but bets are still off in the House, where it seems the bill’s fate is hanging in the balance of one provision backed, drafted, and drilled by Nevada’s own Shelley Berkley.
After several days of debate, the Senate voted to pass the president’s tax package, with a few tweaks, by a filibuster-proof majority of 81-19.
But the package they passed includes an provision to correct the expected drop-off in estate taxes that is likely to be the measure’s death knell in the House, unless it gets changed. That means we might see the bill back on the Senate floor before this Congress is out.
The tax bill now goes to the House, where the Rules committee is expected to meet as early as this afternoon to lay out the game plan for how the bill will be considered, and potentially amended, on the floor.
Chief among the expected changes is Congresswoman Berkley’s bill estate tax revamp, presently part and parcel of the bill.
Come Jan. 1, taxes on all things inherited skyrocket up from zero percent to 55 percent for most Americans.
Berkley’s measure, which was incorporated into Obama’s bill that is expected to pass the Senate today, attempts to set that rate at 35 percent, and give an exemption on the first $5 million dollars that an individual inherits ($10 million if it’s a couple).
House Democrats that wanted to the tax cut extension directed exclusively at the middle class but have effectively lost that fight are now focusing on scaling back Berkley’s bill from its current levels to a 45 percent rate, with an exemption on the first $3.5 million of an estate.
“I want — absolutely — a separate vote on the estate tax,” said New York Congresswoman Louise Slaughter, chairwoman of the Rules committee, which will decide later today which proposed changes to the plan get a vote. “There’s no question in my mind that we need to do that. And some of us would like to have a vote on the middle class tax cut.”
“If it’s [a change on the estate tax] adopted, and the Senate adopts it, the bill passes, flying away,” said New Jersey Congressman Bill Pascrell, outside a meeting of the Democratic caucus. “But if it’s not adopted, how many Democrats will vote no?”
Even that calculus, however, poses problems. Because even if they change the provision, House Democrats will have to be sure that their Republican counterparts — and the whole Senate — will swallow it.
Republicans like the look of Berkley’s estate tax proposal — as well as the bill, generally, as it stands.
All but five Republicans in the Senate voted to pass the bill — though Nevada’s John Ensign was not in their number.
“I’m for extending the current tax rates and making sure that those tax increases don’t go into effect....and I believe we should have extended unemployment benefits,” he said, but adding that “we should have done so with spending cuts in other places.”
Ensign has come under fire from Democrats in the state for advocating for the tax cuts in the package, but then refusing to vote for them on spending principle. But he’s got a handful of allies in that fight.
Ensign co-proffered an amendment with Sen. Tom Coburn of Oklahoma to try to force some offset cuts to the tax bill Wednesday. The amendment was not adopted, but did gain the support of 47 senators, including every Republican.
The Senate considered several other amendments Wednesday, including a proposal by Sen. Jim DeMint to make all the tax cuts permanent — but they did not pass.
Leaders on both sides of the aisle appeared to be preserving their agreement at all costs — even turning down a request by Louisiana Democrat Mary Landrieu to correct what she and several conservative Republicans agreed was “a mistake”: about $42 million pre-approved low-income housing projects along the Gulf coast, left out of the final draft of the bill.
Debate over that change dominated the final 20 minutes before the vote — but while leaders of both parties agreed that a fix was in order, they said was too late to change the bill on Wednesday — and promised to take up the issue next year.
Reid applauded the Senate’s efforts to pass the bill, but not without noting its imperfections.
“Middle class families need a boost in this economy, and that is exactly what this plan gives them. It is not perfect, but it will create 2 million jobs, cut taxes for middle class families and small businesses, and ensure that Americans who are still looking for work will continue to have the safety net they rely on to make ends meet.”
Reid had long backed the idea of extending taxes on the first $250,000 of household income only.
In the House, Nevada’s delegation is expected to back the bill.
“I have had some problems with the deal, but I’m certainly not going to be in a position to not vote for something that gives people a tax break,” said Nevada Congresswoman Dina Titus Tuesday night, emerging from the meeting.
Many Democrats have said their hands are essentially tied — like all parts of the bill or not, they’re running out of time to keep taxes down, and resuscitate lapsed unemployment benefits.
“There’s no whipping going on, and it’s more or less a conscience vote at this point,” Berkley said as she left the meeting. She said earlier this week that even if the Democratic caucus voted to change her estate tax provision, she’d vote for the bill. “I think you’re either going to accept the package as a whole, or reject the package as a whole...I am voting for it. That’s not deal breaker for me.”
But even that’s just political talk. When asked, Berkley admitted: there is no deal breaker for her on this bill.