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Lame duck, in endgame, looks beyond tax-cuts

By Kathleen Hennessey and Lisa Mascaro

McClatchy Newspapers

Published: Wednesday, Dec. 15 2010 11:58 p.m. MST

Senate Majority Leader Sen. Harry Reid of Nev. talks on the phone as he walks to their Senate Democratic caucus on Capitol Hill in Washington Wednesday, Dec. 8, 2010.

Associated Press

WASHINGTON — Senate passage of an $858 billion tax plan and House approval of a repeal of the "don't ask, don't tell" policy against gays in the military reset the clock Wednesday on the final hours of the lame duck Congress, which could pass a raft of landmark legislation, or nothing at all.

A determining vote is expected today in the House. If House Democrats agree to pass President Barack Obama's tax cut compromise plan as written in the Senate, there may be time for more action in the Senate, including the "don't ask, don't tell" repeal and approval of the arms reduction treaty with Russia, among other items.

If the House instead defeats the plan or passes an amended version, the Senate is even less likely to consider anything else before adjournment.

The stakes were underscored in a flurry of threats and maneuvers traded by Democrats and Republicans. Conservative Republicans threatened to force lengthy public readings of massive bills, while Democrats warned of business sessions through the holidays, and beyond.

Amid the skirmishing, the Senate on Wednesday approved the tax cut package 81-19, a rare bipartisan vote that left House Democrats in a politically difficult spot.

House Democrats remained at odds with the White House over the deal struck with congressional Republicans to extend the tax rates passed during the George W. Bush administration at all levels — including the 2 percent of American families earning beyond $250,000. But Obama, speaking at the White House, urged lawmakers to set aside their differences and pass "this essential economic package."

Republicans in the House are largely behind the proposal, but face pressure from prominent party leaders and tea party groups to oppose new deficit spending.

In the Senate, 14 Democrats and five Republicans voted against the package.

Senators shot down three amendments — one favored by Republicans to permanently extend all tax cuts and repeal the estate tax; another favored by the GOP to pay for the jobless aid from spending cuts elsewhere, and a liberal proposal to extend the tax cuts only to earnings less than $250,000.

The package would extend the Bush-era tax breaks for two years for virtually every American taxpayer and reinstate the lapsed estate tax at a 35 percent rate. Democrats prefer a 45 percent rate.

The package also would provide unemployment assistance through 2011 for up to 7 million jobless Americans whose extended aid is otherwise expiring, and establish a 2-percentage-point payroll tax holiday for each worker.

Democrats in the House began to acknowledge that they have little power to alter the bill without launching an extended debate across the Capitol that could further endanger their priorities.

"The White House will get what it wants," said Rep. Brad Sherman, D-Calif. "They want the bill delivered to the president's desk, not delivered to the Senate even with modest changes."

The House measure repealing the don't ask, don't tell policy, essentially a repeat of a similar vote in May, was intended to boost that Democratic goal as leaders plotted a strategy through more hostile territory in the Senate before lawmakers go home for the holidays.

Along with other top Democratic measures — an arms treaty with Russia and a youth immigration act — the repeal would stand little chance of passage next year, when Republicans take control of the House and increase their numbers in the Senate.

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