Obama's tax deal clears test vote in Senate

WASHINGTON - (AP) ? President Barack Obama's tax deal withRepublicans gained enough votes in the Senate on Monday to moveforward to final passage as the White House charts a untestedbipartisan course into the New Year. The unusual alliance of Obama and leaders of both parties in theupper chamber eased the tax deal over a first hurdle. It easilysurpassed the necessary 60 of 100 votes needed to move thecompromise to a final vote in the next few days. Passage in the House of Representatives, however, remained inquestion. Liberal Democrats voted last week to block the compromisedeal from coming to a vote. The tax deal moved forward as Congress winds down a finalsession before the Democrats cede their majority to Republicans inthe House of Representatives in the next Congress. It convenes inearly January. The Senate will remain under Democratic control, but thepresident's party will hold a much diminished majority. It was that reality, the result of a Republican landslide incongressional elections last month, that prompted Obama to strikethe tax deal with Republicans. The deal marks a test of how Obama will manage to govern withouthis party in control of both houses of Congress. His readiness toreach accommodation with the opposition party likely will set apattern for the final two years of his term. The compromise that came to a procedural vote in the Senate lateMonday afternoon would extend Bush-era tax cuts for all incomebrackets despite Obama's historic opposition to keeping lower ratesin place for U.S. households earning more than $250,000 a year. Faced with the prospect of higher taxes across all incomebrackets, Obama chose compromise. In return, Republicans droppedopposition to an extension of payments to the long-term unemployed.The deal would guarantee those payments continue for 13 months. Additionally, the plan would reduce payroll taxes by 2 percent.Those assessments go to fund Social Security, the federal pensionsystem for older and disabled Americans. The main sticking point is a big expansion of the ceiling atwhich estates are taxed. The leader of the House, Speaker NancyPelosi, initially called that part of the deal "a bridge too far"and has been joined in hot opposition to that part of the measureby liberal Democrats in the lower house. The package Obama negotiated would set the top rate at 35percent and exempt the first $5 million of an individual's estate.Couples could exempt $10 million. Without the deal, the estate taxwas scheduled to return next year to a top rate of 55 percent forestates larger than $1 million for individuals and $2 million formarried couples. Despite a vow among House Democrats to keep the measure fromreaching the floor in the lower chamber, Majority leader StenyHoyer said on Monday that he believed it would come to a vote.

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