Tax Deal Fight Now Focuses on House Challenge on Estate Tax

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Sanders Filibuster Halted By Senate

Tax Deal Fight Now Focuses on House Challenge to Estate-Tax Exemption

By John Nichols
Posted on TheNation.com, December 14, 2010

In a display of how Washington insiders practice bipartisanship, most Senate Democrats voted with most Senate Republicans to deliver for the wealthiest Americans.

Senators from both parties, self-identified liberals and conservatives, united to end a filibuster by Vermont independent Bernie Sanders [1], who has led the fight to block an Obama administration deal with Congressional Republicans that extends tax breaks for billionaires and establishes estate-tax exemptions for millionaires.

Sanders conducted an eight-and-a-half-hour filibuster Friday, in which he outlined arguments against the agreement to trade a two-year extension of tax cuts for the wealthiest Americans, along with sweeping estate-tax exemptions, for a one-year extension of benefits for unemployed workers.

On Monday, Senate majority leader Harry Reid, D-Nevada, serving as floor manager for the deal cobbled together by the Obama administration and Senate minority leader Mitch McConnell, R-Kentucky, sought a cloture vote to end the filibuster and open debate on the plan.

Sixty votes were needed to end the filibuster. Reid secured an overwhelming eighty-three.

Most of the fifteen votes to support Sanders's filibuster came from Democrats. Senators Jeff Bingaman of New Mexico, Sherrod Brown of Ohio, Russ Feingold of Wisconsin, Kirsten Gillibrand of New York, Kay Hagan of North Carolina, Frank Lautenberg of New Jersey, Pat Leahy of Vermont, Carl Levin of Michigan and Mark Udall of Colorado voted with Sanders.

They were joined by five Republicans: Oklahoma's Tom Coburn, South Carolina's Jim DeMint, Alabama's Jeff Sessions, Nevada's John Ensign and Ohio's George Voinovich.

The lopsided vote provided an indication that the Senate is likely to approve the agreement.

Sanders remained defiant, however, signaling that approval will not come easily—or quietly. "It makes no sense to me to provide huge tax breaks for millionaires and billionaires while we drive up the national debt that our children and grandchildren will have to pay," the Vermonter said. "I further object strenuously to the lowering of rates on the estate tax, which only benefits the top 0.3 percent, the very, very wealthiest people in this country. I also am concerned about a significant precedent which diverts $112 billion in payroll taxes away from the Social Security trust fund. Our goal now must be to strengthen Social Security, not weaken it. Of course we must extend unemployment benefits and the tax breaks that the middle class desperately needs, but in my view we could have and should have negotiated a much stronger agreement."

The Senate vote may not come until Wednesday, and significant debate is expected before it comes.

While Sanders will be expressing broad opposition, there will also be attempts to amend the legislation. As of now, it is unclear whether amendments will be allowed. The White House is opposed at this point. However, Democratic and Republican senators have proposed amendments, with the most significant being a proposal by a group of Democratic senators to limit the extension of Bush-era tax breaks only to Americans earning less than $1 million a year.

One the Senate votes, action will move to the House, where the number-two Democrat, majority leader Steny Hoyer of Maryland, says "significant" amendments might yet be made.

"There certainly seems to me to be some room for a change which may or may not be perceived by some to be significant," said Hoyer.

Hoyer suggested Monday that House Democrats may push to limit exemptions for estates. As the agreement now stands, there's a a 35 percent estate tax with exemptions for the first $5 million for individual estates and the first $10 million for couples.

House Democrats have been advocating for a 45 percent tax exempting only the first $3.5 million of inherited estates.

United for a Fair Economy , which has noisily objected to the estate-tax deal, held out hope for the House to do the right thing.

"The Senate’s decision to approve the ill-conceived tax package negotiated between Obama and GOP leaders is shameful," said UFE executive director Brian Miller. "Fortunately, the buck does not stop in the Senate. We are calling on the House to fight back and win a better deal for the sake of middle- and working-class Americans—those who will be saddled with massive new debt to pay for wasteful tax breaks for millionaires and billionaires." (emphasis added)

If the two chambers pass different versions of the legislation, they will have to be reconciled in a House-Senate Conference Committee. Such a session would provide a last opportunity to alter the agreement between Obama and the Republicans.

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