House sends tax deal to Obama unaltered

WASHINGTON — A sweeping plan to extend expiring tax cuts and jobless benefits for millions of Americans was on its way to President Obama for his signature after the House of Representatives voted late Thursday night to pass the bill despite opposition from liberal Democrats.House Democrats, navigating an attempted revolt within their own party that threatened to derail the measure, joined Republicans in turning back proposed last-minute changes to the estate tax that would have sent the bill back to the Senate for more work.

The legislation passed 277-148 just before midnight. Obama is expected to sign the measure.

"Congress made the right decision ... to prevent a job-killing tax hike on Americans and small businesses," said Rep. Dave Camp, R-Mich.

The proposal, which the Congressional Budget Office says will cost $858 billion over 10 years, extends income tax cuts for two years at all income levels, creates a 2-percentage-point cut in payroll taxes for one year and continues benefits for the long-term unemployed for 13 months.

Though the agreement won broad bipartisan support in the Senate, a group of liberal House Democrats orchestrated an 11th-hour push to change the measure. Liberals wanted to lower the amount couples could pass on to heirs free from the estate tax from $10 million to $7 million.

"This is a bad deal," said Rep. Peter DeFazio, D-Ore., who led opposition to the bill.

The contentious negotiations underscored the hostility many House Democrats felt toward the agreement, which was worked out between Obama and Republicans. Initially, the bill was set for a vote Thursday afternoon, but leaders delayed it when it was clear there was not enough support.

House lawmakers began debate on the bill a day after the Senate approved the tax agreement. The proposal drew support from 44 Democrats and 37 Republicans in the Senate, among the most bipartisan votes on a controversial issue in years.

Congress faced a tight deadline: Without action, the tax cuts approved in 2001 and 2003 were set to expire Jan. 1, affecting every taxpayer. A family with an income of $63,366 would have seen its federal income tax rise $1,540, according to the non-partisan Tax Foundation.

House Democrats faced an additional challenge. Any changes to the bill would have sent the measure back to the Senate for another vote, setting up a potential stalemate. Republicans, including Senate Minority Leader Mitch McConnell of Kentucky, said they would have blocked passage of a modified bill.

The massive bill, which would add more to the deficit than the $814 billion economic stimulus passed in 2009, was one of the final major policies facing lawmakers in the year-end session that began after the midterm election.

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