US House nears passing embattled tax deal

17th December 2010, Comments 0 comments

The US House of Representatives churned late Thursday towards passage of President Barack Obama's contentious deal with Republicans to avert a New Year's tax hike, despite a Democratic rebellion.

House passage of the 858-billion-dollar measure, expected to give the US economy a much-needed boost while digging the country's deficit and debt deeper, would send the bill to the president to sign into law.

Obama, seeking a restorative bipartisan victory six weeks after Republicans routed his Democrats in November 2 elections, has stressed the package extends middle-class tax cuts for two years and jobless benefits for 13 months.

But angry Democrats from the party's left flank opposed the plan for including an identical extension for the richest sliver of US earners and rolling back the inheritance tax that affects only the wealthiest estates.

The legislation survived a key test vote by a 214-201 margin and was expected to secure final passage after a vote on an amendment to toughen the inheritance tax, which senior Democratic aides predicted would fail.

The White House compromise sets the inheritance tax rate at 35 percent and exempts estates under five million dollars, compared to 45 percent and 3.5 million dollars in a House-passed bill earlier this year.

Obama -- who campaigned on a vow to let tax cuts lapse on income over 250,000 dollars for families or 200,000 dollars for individuals -- piled pressure on Democrats to approve the package.

Soon after the Senate passed the plan in a sweeping 81-19 vote, Obama called on skeptical Democrats in the House to pass the bill unchanged, in one of their last acts before Republicans take control of the chamber in January.

"I want to get it passed as soon as possible," the president said, after a meeting with 20 corporate chief executives, part of his political repositioning after his party suffered a drubbing in mid-term elections in November.

Lawmakers also forged ahead on Obama's top foreign policy, the new Strategic Arms Reduction Treaty (START) with Russia, as Republicans worked to kill the nuclear arms control accord or at least put off a final vote until next year.

Top US military officials rebuffed Republicans charges that the pact will cripple US missile defense plans, as Democratic Senate Majority Leader Harry Reid set the stage for a likely ratification vote next week.

"We need START and we need it badly," General James Cartwright, the vice chairman of the Joint Chiefs of Staff, told reporters, stressing the treaty included "no prohibitions to our ability to move forward in missile defense."

"This treaty in no way limits anything we have in mind or want to do on missile defense," agreed Defense Secretary Robert Gates. "I think that there were some legitimate concerns. But, frankly, I think they've been addressed."

The agreement -- which has the support of virtually every present and past US foreign policy or national security heavyweight -- restricts each nation to a maximum of 1,550 deployed warheads, a cut of about 30 percent from a limit set in 2002, and 800 launchers and bombers.

The accord would also return US inspectors who have been unable to monitor Russia's arsenal since the treaty's predecessor lapsed in December 2009.

Obama won a critical victory when lawmakers voted 66-32 Wednesday to take up the pact despite fierce Republican charges -- flatly denied by the Pentagon -- that it will cripple US missile defense plans.

That margin put Democrats within striking distance of the 67 votes needed to ratify START if all 100 Senators are present -- and one of those absent, Democratic Senator Evan Bayh, has pledged to back the agreement.

Democratic Senator Ron Wyden has said prostate cancer surgery may cause him to miss the final vote, but his absence would mean the treaty needs 66 votes to be ratified.

The effort gets more complicated some January, when Senate Democrats see their numbers shrink to 53 and they need to get 14 Republicans -- up from nine -- in order to approve the treaty.

© 2010 AFP

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