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President’s tax deal clears Senate, faces House next

Bryan Alaspa's picture

The tax deal that was worked out by President Obama and the Republican leadership in Congress has now been cleared in the Senate. The measure then faces opposition and debate in the House, although both political parties have urged House members to pass the bill.

The hurdle cleared on Monday is just the first of many for this bi-partisan bill. The final vote in the Senate may happen on Tuesday. The deal is controversial for some because it does include extending the tax cuts for the wealthiest Americans for two years. However, the bill also extends the unemployment benefits for those still out of work for another 13 months and it cuts payroll taxes by 2% for a year.

Both parties negotiated

In order to try and break the deadlock and get the measure passed President Obama called members of the Republican party to the White House over the weekend to work out a deal. The Republicans have stated, repeatedly, that they would not even consider any other measures in Congress unless some kind of extension of the tax cuts was brought before them. To some, this deal does not sit well with supporters of Obama.

Yesterday, according to media reports, President Obama made a plea to House Democrats to pass the bill. There is already anticipated hostility toward the bill from many Democratic members. President Obama, yesterday, acknowledged that there are members of both parties who are unhappy with the compromise but said he felt that the bill would help the economy in the long run.

The bill was praised by some in both parties during yesterday’s discussions. Those who support the bill praised President Obama’s willingness to work with members of both parties to get the measure through. Some Senate leaders warned the House not to make any changes to the bill, which would then send the it back to the Senate for another vote and further debate,

The deadline is looming. The tax cuts that have been such a sticking point end on January 1, 2011. Those in favor of the compromise say that must get this measure passed before the end of the year to ensure a tax hike does not occur. The unemployment benefits for many Americans also runs out before the end of the year.

The tax benefit packages in the measure are expected to add $893 billion to the overall federal debt over the course of five years. That information comes courtesy of the Congressional Budget Office.

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