The White House and key lawmakers cleared the way Thursday night for swift Senate action to avert a Jan. 1 spike in income taxes for nearly all Americans, agreeing to extend breaks for ethanol and other forms of alternative energy as part of the deal.
WASHINGTON — The White House and key lawmakers cleared the way Thursday night for swift Senate action to avert a Jan. 1 spike in income taxes for nearly all Americans, agreeing to extend breaks for ethanol and other forms of alternative energy as part of the deal.
Tax provisions aimed at increasing production of hybrid automobiles, biodiesel fuel, energy-efficient homes, coal and energy-efficient household appliances would be extended through the end of 2011 under the bill.
Debate on the expanded measure began almost immediately. While there is no precise timetable for passage, a test vote was set for Monday afternoon that appears likely to demonstrate overwhelming support for the legislation, which backers say would help accelerate a sluggish recovery from recession.
The events unfolded as the White House predicted that the agreement between President Barack Obama and top Republicans would clear by year end — even though House Democrats voted Thursday not to allow it to reach the floor without changes to scale back tax relief for the rich.
"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."
"The deal will get passed," said presidential press secretary Robert Gibbs. There were no predictions to the contrary among senior Democrats on either side of the Capitol.
As announced by Obama on Monday, the deal would extend tax breaks at all income levels that are due to expire on Jan. 1, renew a program of jobless benefits for the long-term unemployed that is due to lapse within days and implement a one-year cut in Social Security taxes.
At the insistence of Republicans, it also includes a more generous estate tax provision. That, in turn, infuriated Democrats already unhappy with Obama for agreeing to extend personal tax cuts at incomes above $200,000 for individuals and $250,000 for couples.
The two-year cost of the plan, estimated at about $850 billion, would further swell record federal deficits.
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. With unemployment at 9.8 percent, a top White House official warned Democratic critics Tuesday they risk sending the economy back into recession if they block the measure.
In the Senate, the emergence of bipartisan legislation also indicated progress for the White House and Senate Majority Leader Harry Reid, D-Nev., toward possible year-end passage of other major items on their agenda.