U.S. Congress passes $858 billion tax-cut extension

[News_Editor]

U.S. Congress passes $858 billion tax-cut extension

2010-12-18 00:35:05 GMT+7 (ICT)

WASHINGTON D.C. (BNO NEWS) -- The U.S. Congress on late Thursday passed a $858 billion tax-cut extension to continue for two more years the tax breaks enacted under President George W. Bush, the Washington Post reported.

The bill was passed after a 277 to 148 vote as 112 Democrats and 36 Republicans voted against the measure. The multi-million dollar package was introduced by President Barack Obama and Republican leaders before the November elections, and led to sharp criticism against Obama.

Democrats rejected the measure and claimed that the Bush-era tax cuts were designed to benefit wealthy taxpayers. In addition, Democrats launched a last-minute campaign against the bill without success. On the other hand, Republicans said that the bill will have a positive effect on the economy.

After the positive vote, the Congress sent the legislation to the President who will sign it into law at around 3.50 p.m. EST.

The measure is aimed at preventing tax raises for middle-class citizens on New Year's Day. Furthermore, the bill will guarantee unemployed workers in some states an extension of jobless benefits for up to 99 weeks. The package will create new incentives for businesses and consumer spending in 2011.

Earlier this week, the Senate approved the $858 billion package on a vote of 81 to 19. This represented the strongest bipartisan victory on a major initiative for Obama. Liberals opposed the legislation as they fear the extension could become permanent in the future.

The recently-approved legislation will also extend many expired and expiring tax breaks, including a research and development tax credit and a college tuition tax credit that was created in the 2009 economic stimulus law.

President Obama considers this extension an opportunity to develop a tax-reform plan that is necessary to address the increasing national debt. The U.S. leader called on many House Democrats to support the bill and succeeded after the bill earned the necessary votes to be approved.

However, Obama continues to face criticism over the measure and - at one time - the White House went as far as flooding journalists with e-mailed statements from politicians who supported it.

Obama negotiated the deal with Republicans, who will take over the House majority in January after Democratic lawmakers refused to address the expiring Bush-era tax cuts. The President decided not to eliminate the Bush tax cuts for the wealthiest taxpayers and in return he secured the extension of the emergency unemployment benefits as the program expired last month.

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