House Democrats seek changes in tax bill

WASHINGTON - As the Senate prepared to push through a sweeping tax package negotiated by the White House and congressional Republicans, liberal Democrats were laying plans to unravel the deal in the House by changing the terms of a provision that would revive the federal estate tax.

Senate leaders, meanwhile, postponed a vote on the $858-billion package until this afternoon. Despite the delay, the measure was expected to sail through the Senate with even stronger support than it received in a test vote this week, when 83 senators voted to advance the package in the strongest bipartisan vote on a major initiative since President Barack Obama took office.

The measure would extend for two years an array of tax breaks enacted during the George W. Bush administration that are set to expire Dec. 31, including benefits championed by Republicans for the wealthiest households. In return, Obama secured another year of emergency jobless benefits and fresh incentives to boost the economy, including a 2-percentage-point reduction in the payroll tax for all workers in 2011.

Sen. Sherrod Brown (D-Ohio) said he was leaning toward voting for the package after voting against it Monday "to send a message to the House that there are allies here." Brown, one of the Senate's most liberal members who is up for re-election in 2012, said he changed his mind after speaking with his minister and reading letters from constituents who are struggling to find jobs in his hard-hit home state.

The strong Senate vote also appeared to be weakening resolve among House Democrats to block the measure. Senior Democrats said the House is likely to stage votes to amend the estate tax and possibly other provisions to assuage anger among the Democratic rank and file over what they viewed as an overly generous deal for the wealthy. But it was not clear that such amendments would pass.

House Majority Leader Steny Hoyer (D-Md.) told reporters that although "significant concerns" remain about the deal, the "overwhelming majority" of lawmakers in both parties think it's "absolutely essential" to approve a measure to prevent tax rates from rising across the board next year.

House Democrats met into the evening outlining a strategy that focused increasingly on the estate tax. Outraged by the agreement to exempt individual estates worth as much as $5 million from taxation, senior House Democrats said they would press to lower the threshold to $3.5 million when the measure reaches the House floor this week. They also want to impose a stiffer tax on larger estates.

The higher tax would hit about 6,600 of the nation's wealthiest households over the next two years, Democrats said, while raising an additional $26 billion that could be used to reduce the soaring national debt.

As liberals complained, a growing chorus of conservatives also criticized the tax package, particularly its failure to permanently extend the Bush-era cuts. However, Americans for Tax Reform, an anti-tax group led by GOP activist Grover Norquist, endorsed the deal yesterday, and House Republican aides said they expected no more than 20 GOP lawmakers to vote against it.

Combined news services