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Obama predicts tax bill passage, possible changes

IRS forms  (Scott Olson, Getty Images)
IRS forms (Scott Olson, Getty Images)
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Updated: 12/10/2010 8:45 am

WASHINGTON (AP) — President Barack Obama is predicting congressional approval of the tax-cutting compromise he has reached with Republican leaders, but he's not ruling out that unhappy congressional Democrats will make some changes in the mammoth legislation.

In an interview with NPR released Friday, Obama said that despite 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 January 1st because Congress didn't act."

The pact 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 generous 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 reach 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 final details.

"Keep in mind, we didn't actually write a bill. We put forward a framework. I'm confident that the framework is going to look like the one that we put forward," he said.

The measure appears headed for Senate approval after negotiators added a few sweeteners to promote ethanol and other forms of alternative energy.

Tax provisions designed to increase 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 timetable for passage in the Senate, but a test vote was set for Monday afternoon that appears likely to demonstrate overwhelming support for the legislation. Supporters say it would help accelerate a sluggish recovery from recession.

"This bill is not perfect, 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 generous estate tax provision. That infuriated Democrats already unhappy with Obama for agreeing 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 preliminary congressional estimate.

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

Vice President Joe Biden has told Democrats in closed-door meetings this week that they are free to oppose the agreement but it might unravel if they do.

"If it's take it or leave it, we'll leave it," said Rep. Lloyd Doggett, D-Texas, after a closed-door meeting in which rank-and-file Democrats chanted, "Just say no."

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

Senate GOP leader Mitch McConnell has said he expects most Senate Republicans to support the tax bill. Prominent House Republicans back it, too.

Among the energy tax provisions added was an extension through 2011 for the current 45-cent per gallon subsidy for ethanol, at a cost to the Treasury estimated at nearly $5 billion. The issue is of particular interest to lawmakers from Midwestern states with grain crops.

"While this legislation is not as long as we had hoped, it is a commonsense approach that will ensure American ethanol production continues to evolve and new technologies commercialized," said Bob Dinneen, president of the Renewable Fuels Association.


©2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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doug1 - 12/10/2010 2:14 PM
0 Votes
cut taxes and spending. then let's make two amenments to the constituion. a balanced budget and term limits for all federal elcted public servants. the government serves the people. we make the rules, not the government. we must stop this out of control governmentfrom getting any bigger. no more entitlements to the "poor" people. if we cut ALL taxes businesses can create jobs and hire people and people will have more money to spend. thereby helping the economy. businesses create jobs, not the government. let the private do what they're supposed to do, not the government. dragster1.

Mimi47 - 12/10/2010 8:55 AM
1 Vote
Tax cuts do NOT cause debt..Out of control SPENDING causes debt!!!
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