House Democrats seemed to be moving Tuesday toward letting a tax measure that includes major estate tax and foreign life and annuity tax provisions pass.
The tax measure — Senate Amendment 4753 to H.R. 4853, a bill that originally was an airport and airways trust fund bill — continued to draw fire from many House Democrats, but other House Democrats were announcing plans to support the measure.
President Obama negotiated the measure, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, with Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader John Boehner, R-Ohio, who is preparing to succeed Nancy Pelosi as speaker of the House.
The measure would preserve extended unemployment insurance benefits for 13 months. The measure also would extend a number of tax breaks created by the Economic Growth and Tax Relief Reconciliation Act of 2001. One little-noticed provision, Section 750, would extend rules in Internal Revenue Code Section 953 and Section 954 that affect some life insurers’ income taxes. Another provision, which has drawn harsh attacks from many Democrats, would set the estate tax personal exemption at $5 million for 2 years and set the top estate tax rate at 35%.
Members of the Senate voted 83-15 Monday to limit debate on the measure to 30 hours. The vote on the debate limit, or cloture motion, would permit Senate leaders to bring the measure to the Senate floor as early as Wednesday.
Some House Republicans, such as Rep. Jeff Flake, R-Ariz., oppose the measure, arguing that it would increase the federal budget deficit, but Republican leaders seem to be sure that they can get strong Republican support for the measure in the House. The measure could still die in the House, or emerge in an amended form that cannot get through the Senate, if large numbers of Democrats make good on threats to vote against it.
Despite the Senate cloture vote, many House Democrats continued to blast the measure.
Rep. Rush Holt, D-N.J., today said he opposes the measure because it includes a payroll tax holiday provision that he believes could hurt the solvency of Social Security.
“This tax agreement isn’t just a matter of tweaking the tax code for a couple of years,” Holt says in a statement. “This agreement, as it stands, would fundamentally change the way we treat Social Security. We should not leave town if it means using Social Security as a rainy-day fund to allow some in Washington to give tax cuts to the wealthiest 2% of Americans.”
At The Washington Post, Ezra Klein is suggesting that the House might effectively kill the measure by amending it and requiring supporters to try to rush it back through the Senate.
But poll results released this week by Gallup, ABC/Washington Post and the Pew Research Center all show that a plurality or majority of the participants said they support the measure.
Rep. Peter Welch, D-Vt., a leader of efforts to block the measure, reportedly told The Hill, that he believes the measure will pass. “The bottom line is that it is a fast moving train,” Welch said, according to The Hill. “Washington is doing what it is finding easy to do.”
The Huffington Post says at least 27 of the 54 members of the relatively conservative Blue Dog Democratic caucus have signed a letter asking House Speaker Nancy Pelosi, D-Calif., to help pass the tax measure as quickly as possible.