House passage of the $858 billion measure is expected late tonight after three hours of debate. The House passed, on a 214-201 vote, the contentious rules for floor debate.The House Democratic leadership put the bill on ice while it worked out a way for some lawmakers to make clear their opposition to a provision on estate taxes. The measure would add to the deficit, angering budget hawks in both parties. Still, President Obama has urged unhappy Democrats and Republicans to pass the measure, saying it is a compromise aimed at jump-starting the economy.
The bill would extend for two years tax cuts enacted in 2001 and 2003 by President George W. Bush that affect all income levels. Those tax cuts expire on Jan. 1. It would also extend for 13 months jobless benefits for the long-term unemployed and provide a temporary cut in payroll taxes. Obama gave up on his campaign pledge to only seek tax cuts for families earning less than $250,000, which raised the ire of liberals in his party who believe the bill does too much to help upper-income people. On estate taxes, couples would be allowed to pass up to $10 million onto their heirs tax free. Estates above that would be taxed at 35%. As several lawmakers noted, the deal represents the reality of the midterm elections, in which Republicans won 63 seats to regain the House majority. Many Republicans wanted to extend the Bush tax cuts permanently, but conceded to a two-year extension as a compromise with Obama. “We can do better and I fully expect when Republicans become the majority in the House, we will do better,” said Rep. Joe Barton, R-Texas.