December 10, 2010 / 3:34 PM / 9 years ago

UPDATE 2-US House likely to pass reworked tax deal -aide

* Democrats push for changes in estate tax

* Many Democrats may still vote ‘no’

(Updates with many Democrats may oppose revised bill)

By Thomas Ferraro and Richard Cowan

WASHINGTON, Dec 10 (Reuters) - The U.S. House of Representatives will likely pass next week, provided Republicans accept some changes, the framework of President Barack Obama’s plan to extend tax cuts, a senior Democratic aide said on Friday.

The aide said House Democrats, before permitting a vote, would demand a tightening of the estate tax provision.

“Many House Democrats may still oppose the final bill,” the aide said, adding that it would need overwhelming Republican support to pass. Most, if not all, Republicans are expected to back the far-reaching package.

The House will likely approve the basic framework of the president’s proposal, “but with some changes,” beginning with the estate tax, the Democratic aide said.

Democrats are fuming that Obama conceded to Republican demands that the estate tax be lowered from 45 percent to 35 percent. The president also agreed to boost the exemption to estates of $5 million or less from $3.5 million, meaning fewer estates will be affected.

Most Democrats have backed the 45 percent rate with a $3.5 million exemption, calling the Obama-Republican plan a giveaway to the ultra-rich.

The senior Democratic aide said it remained unclear what changes in the estate tax Democrats will propose in the overall package. “Hasn’t been decided yet,” the aide said.

House Democrats at a closed-door meeting on Thursday angrily agreed not to bring the Obama-Republican proposal up for a vote unless revisions, including the estate tax, were made.

Obama agreed to extend tax cuts for virtually all taxpayers, including the wealthiest Americans, set to expire at the end of this month.

Democrats had long favored limiting the renewal only to annual income for families and individuals of up to $250,000 and $200,000, respectively.

The president cut the deal with Republicans, saying he did not want to risk taxes rising for most Americans in January, fearing it would hurt an already ailing U.S. economy.

The House could begin consideration of the measure within days of anticipated Senate passage next week of a Senate version of the plan.

The Senate opened debate late on Thursday, after Senate leaders made changes of their own. A key procedural vote is set for Monday.

The Senate version reflects the terms Obama reached with Republicans. The bill adds a subsidy for ethanol but leaves out the Build America bonds program popular with Democrats and local governments.

Reporting by Thomas Ferraro and Richard Cowan; Editing by Jackie Frank

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