WASHINGTON - The Senate yesterday passed legislation that would temporarily extend the George W. Bush-era tax cuts and renew unemployment benefits for 7 million Americans, moving the compromise package on to the House of Representatives.
Despite qualms from members of both parties in the House, final congressional action seems possible by week's end. The exact timing will depend on whether Democrats are successful in efforts to amend the package.
The final vote in the Senate was 81-19.
Besides the tax-rate and unemployment-insurance extensions, the bill would trim the payroll tax by 2 percentage points for a year and reinstate the estate tax, but at a lower rate than was in force before it lapsed at the end of 2009.
The Senate defeated amendments that would have made tax cuts permanent, or extended tax cuts only on the first $250,000 in income.
House Democrats, who revolted against the package last week, will target the estate-tax provision, preferring a 45-percent estate tax that would be applied to estates larger than $3.5 million for individuals and $7 million for couples.
But Senate Minority Leader Mitch McConnell, R-Ky., warned yesterday that changing the legislation with days remaining in the congressional session could upend the tenuous pact, which the White House agreed upon with Republican leaders.
Speaking before the Senate's action, President Obama again urged Congress to move swiftly in bringing the tax debate to a close.
"We worked hard to negotiate an agreement that's a win for middle-class families and a win for our economy, and we can't afford to let it fall victim to either delay or defeat," he said shortly before heading to a meeting with 20 CEOs.
For its part yesterday, the House voted to repeal the "don't ask, don't tell" policy that for 17 years has forced gays desiring to serve in the military to conceal their sexual identity.
The 250-175 vote propels the issue to the Senate for what could be the last chance for now to end the 1993 law that forbids recruiters to ask about sexual orientation while prohibiting soldiers from acknowledging that they are gay.
It's "the only law in the country that requires people to be dishonest or be fired if they choose to be honest," said Rep. Jared Polis, D-Colo.
Democratic leaders in the Senate said that they are committed to bringing the bill to the floor before Congress adjourns for the year. But they are challenged by opposition from some Republicans and a daunting agenda that includes finishing work on legislation to fund the government and ratifying a nuclear-arms treaty with Russia.
Failure to overturn the policy this year could relegate the issue to the back burner next year when Republicans, who are far less supportive of allowing those openly gay to serve in the military, take over the House and gain strength in the Senate.
"Now is the time for us to act," said House Speaker Nancy Pelosi, and "close the door on a fundamental unfairness in our nation."