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December 15th, 2010
01:39 PM ET

Update: Senate passes controversial tax cut deal

[cnn-photo-caption image=http://www.cnn.com/video/bestoftv/2010/12/13/ac.kth.obama.tax.cuts.cnn.640×360.jpg caption="The vote came hours after President Barack Obama urged lawmakers to approve the deal" width=300 height=169]

CNN Wire Staff

Washington (CNN) - The Senate approved a controversial $858 billion tax cut package Wednesday, overwhelmingly voting to extend the Bush-era tax reductions despite a series of objections from both the left and the right.

The measure, which passed 81 to 19, now advances to the House of Representatives.

Among other things, the package includes a two-year extension of the Bush-era tax cuts set to expire December 31. It also would extend unemployment benefits for 13 months, cut the payroll tax by 2 percentage points for a year, restore the estate tax at a lower level, and continue a series of other tax breaks.

The estate tax - currently scheduled to exempt inheritances up to $1 million and tax amounts above that at a rate of 55% - would be reduced under the tax package to a rate of 35% on amounts above a $5 million individual exemption.

The vote came hours after President Barack Obama urged lawmakers Wednesday to approve the deal, which the White House negotiated with Senate GOP leaders.

"I am absolutely convinced that this tax cut plan, while not perfect, will help our economy and create jobs in the private sector," Obama said. "It will help lift up middle-class families who will no longer have to worry about a New Years' Day tax hike."

House Democrats, however, have repeatedly warned that they may change the measure, particularly provisions dealing with the estate tax.

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soundoff (2 Responses)
  1. Janice Moore

    Are there any consideration for people who have received 99 weeks of unempolyment?

    December 16, 2010 at 6:21 am |
  2. Paula

    The unemployment info is confusing. Will the extension extend unemployment for the so-called "99ers" or just allow those under the 99 weeks to claim extended benefits?

    December 15, 2010 at 4:23 pm |