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Monday, December 13, 2010

Tax Deal Predicted To Pass In The Senate

[Update]- Senate test vote has more than enough votes for cloture- Post here, constantly updated until final vote count is in.

Today the Senate is expected to hold their first procedural vote for cloture, to proceed with the Tax deal Barack obama and Republicans negotiated and according to Senate aides if the motion receives 65 to 70 members' support it will affect how the House of Representatives (still controlled by Pelosi until January) handles the passage in that chamber.

Three Senate aides said the tax package appeared likely to attract at least 65 to 70 supporters Monday in a procedural vote in the Senate to test whether there is support to block a potential filibuster. Sixty votes are needed for the bill to cross that hurdle. A vote on final passage is expected a day or two later.

House aides said Democrats' strategy in that chamber would be affected by the margin of the Senate vote.

"If you have 70 people in a bipartisan vote, I don't see a situation where we really play that game of chicken and change [the bill],'' said a senior aide to a House Democrat supporting the legislation.

For those unaware of what the estate tax aka death tax is:

The estate tax in the United States is a tax imposed on the transfer of the "taxable estate" of a deceased person, whether such property is transferred via a will, according to the state laws of intestacy or otherwise made as an incident of the death of the owner, such as a transfer of property from an intestate estate or trust, or the payment of certain life insurance benefits or financial account sums to beneficiaries.

Of course, House Democrats will have some sort of dog and pony show before hand, some political theater to "register their disapproval" with the estate tax aka death tax provisions that are in the Senate deal.

Under the deal, the estate tax, which has been eliminated for 2010, would be reinstated next year at a top rate of 35% and applied to estates above $5 million. Without action, the rate is scheduled to spring to 55% next year and apply to estates above $1 million.

Many House Democrats argue the deal is too generous to inheritances. Some are arguing to amend the bill to include a top rate of 45%, applied to estates of $3.5 million or more. Another possibility under discussion is introducing and passing a separate bill on the 45% estate tax, then taking up the Senate measure, with its 35% rate, according to a House aide. That could give unhappy Democrats a chance to register their disapproval, without blocking action.

The bottom line here is that House Democrats are in the lame duck session and Pelosi and company cannot afford to have one of their last acts of "control" be the expiration of the Bush tax cuts for everyone to which every American would then see a tax rise by the end of the year.

The Wall Street Journal also provides another detail of why, despite the planned political theater, House Democrats truly are irrelevant to this deal:

It wasn't clear how far House Democrats would push such a fight. If a bill isn't passed by the end of the year, tax rates are scheduled to go up, although the White House could block an immediate increase in withholding levels, pending passage of a tax bill by a new Congress next year.

Next year being when Republicans control the House of Representatives.

So, after the Senate passes the tax deal and the House Democrats put on their little show, in the end the deal is predicted to pass whether it is by the end of the year as one of the last acts the Democratically controlled House passes or whether it is one of the first acts of a Republican controlled House in January.

The most interesting thing here is with the announcement that Obama and Republicans had negotiated a tax deal, Obama potentially could have elevated his standing among Independents and Moderates across America, but far left liberal progressives took a whole week and publicly had what amounts to a hissy fit, turning the potential win into a protracted class warfare fight turning the whole deal against Obama.

Then to top it off, in trying to soothe or win over the far left liberals, Obama put the final nail in the coffin and spectacularly blew it.

[Update] New related post "Tax Deal: Two Separate Polls Show Liberals Fighting Against Majority of Americans, Even Their Own Party."