The House yesterday passed a $56 billion measure that would extend a series of Republican-championed tax cuts, including a break for investors favored by the White House but criticized by Democrats.
The final outcome of the tax-cut extension is not clear, because the House bill — which passed 234-197 — still must be melded with a very different Senate version, and time is running short.
House Republicans said their bill is key to continuing current economic growth, which they attribute directly to President Bush’s tax cuts, which they approved in the past few years.
“This is no time to say we should put the breaks on this economy,” said acting House Majority Leader Roy Blunt, Missouri Republican. “What the underlying bill does is say: ’Let’s not increase taxes.’”
Democrats repeatedly called the legislation a deficit-raising tax cut for the rich at the expense of the poor, pointing also to a bill the House passed a few weeks ago that trims $50 billion from government entitlement programs.
“The poor suffer, the rich benefit, the middle class is paying the bill,” said House Minority Leader Nancy Pelosi, California Democrat.
Nine Democrats joined 225 Republicans in supporting the bill, while three Republicans and one independent joined 193 Democrats in opposition.
The administration praised the House bill — especially the provision that would extend for two years a reduced tax rate for capital gains and dividends income, which is set to expire in 2008.
The House bill would spend $20 billion to extend the investment income relief. The $58 billion Senate bill excludes that provision, but spends about $30 billion to extend for one year a popular provision that prevents millions of middle-class Americans from having to pay the Alternative Minimum Tax (AMT).
Some said House Republican leaders smoothed the way for their bill by allowing the House to vote Wednesday on a separate bill to extend the AMT relief, which passed 414-4.
The Democratic argument was illustrated by Rep. Jim McDermott, Washington Democrat, who held up two Christmas stockings labeled “rich” and “poor” and moved packages from the poor stocking into the rich one, eventually leaving the poor with a lump of coal.
“Merry Christmas,” he said.
Republicans rebuffed those claims, saying that their spending-cuts bill simply reduces the growth rate of some programs and that their tax bill isn’t aimed at the rich. They noted 56.9 million American families, including many who earn less than $50,000 per year, invest their money and, therefore, benefit from the capital gains and dividends tax break.
With the Senate not convening until next week, it seems unlikely that the tax-bill differences will be resolved and passed before the end of the year. A spokesman for House Speaker J. Dennis Hastert, Illinois Republican, said House priorities for the last few weeks of the year are to approve a final version of the spending-cuts bill and to deal with border-security legislation.
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