RPT-Q+A-Obama tax deal looks headed toward approval

* Tax deal seen passing through Congress

* Vote expected by end of next week

* May split House Democrats

WASHINGTON, Dec 8 (Reuters) - President Barack Obama’s deal with Republicans to extend expiring tax cuts seems headed for passage in the Democratic-led U.S. Congress.

Many of Obama’s fellow Democrats complain that the proposed compromise favors the rich, betrays their liberal beliefs and would explode the already huge U.S. debt.

But others agree with Obama that the package would provide help for people in need, including a 13-month extension of jobless benefits, and may be the best deal they can get before Republicans take control of the House of Representatives next month. [ID:nN08104043]

Here are some questions and answers about pending House and Senate votes, which are expected within the next week or so before lawmakers wrap up their work for the year.


The conventional wisdom is that it will pass although Democrats are trying to make some changes, such as including tax breaks for renewable energy and revising a proposed revision of the estate tax.

Senate Majority Leader Harry Reid said his chamber could begin debate this week on the proposal to extend all Bush-era income tax cuts.

Dan Ripp of Bradley Woods, a private firm that tracks Washington for institutional investors, said, “I think it will pass, but not by grand margins.”

Senate Republican leader Mitch McConnell says he expects the “vast majority” of the 42 Senate Republicans to support the proposed compromise, and independent Senator Joe Lieberman predicts that most of the 58-member Senate Democratic Caucus would also back it.


The Senate may begin consideration of the measure within the next day or so. The House plans to take it up if and when the Senate passes it.

The timing of a final vote is unclear but lawmakers hope to leave for the Christmas holidays by the end of next week, thus avoiding a repeat of a crucial vote on healthcare reform last year on a snowy Christmas Eve.


The 255-member House Democratic caucus may split over the proposal, aides and analysts said, with liberals opposing it and conservatives and moderates supporting it.

But only about 40 House Democrats or so may be needed to provide a majority vote for passage. That’s because perhaps all of the chamber’s 179 Republicans are expected to vote for it.

Representative Chris Van Hollen, a member of the House Democratic leadership, told MSNBC, “I’m not sure this bill can pass in this form in the House.”

Ultimately, however, it is expected to be approved.

White House economic adviser Larry Summers said failure to pass the plan would “materially increase” the chance of a double-dip recession.


Obama and Democrats wanted to limit any renewal of the Bush-era tax cuts to family income of up to $250,000. But in the president’s deal with Republicans, all tax cuts would be renewed for two years.

Republicans, in return, agreed to a number of sweeteners, including an extension of jobless benefits as well as a 2 percent cut in the payroll tax.

Democrats want to see tweaks to the package, including changes to the estate tax proposal, which they view as a giveaway to the ultra-rich. They also want to renew the Build America Bond program that funds infrastructure projects.

Subsidies for ethanol and other energy tax breaks may also be brought into the bill, lawmakers said.


Obama is banging the drum for the accord in public comments, while Vice President Joe Biden has been meeting privately with Democrats on Capitol Hill.

“Members want to hear the administration make the case for it,” a senior Democratic aide said. “I think that will tamper down the frustration and anger.”

“There are a lot of things in the deal that the administration should be applauded on. But a lot of things don’t make sense and aren’t good politics,” the aide said.

A number of Democrats complained Obama gave up too much in the deal and got too little in return.

“I’m not saying never compromise,” said Democratic Representative Anthony Weiner. “But he (Obama) and his team just don’t seem to be very good at it.”

Chris Krueger of MF Global, a financial services company, said Obama’s relationship with Democrats has been strained since last month’s midterm elections defeat and were further rocked by the tax deal.

Ripp said the deal answered a key question raised by the election: Would Obama reach out to Republicans in search for a common ground as he prepares to run for reelection in 2012?

“This guy has clearly come to the center,” Ripp said. (Additional reporting by Kim Dixon, Richard Cowan and Donna Smith; editing by Alistair Bell)