WASHINGTON (CN) - The Senate on Tuesday debated President Obama's proposal to extend Bush-era tax cuts for two years. A vote on the measure is expected this week.
"If we continue to borrow money now ... our kids and our grandchildren will be paying higher taxes in the future," Sen. Bernie Sanders, I-Vt., said on the Senate floor. Sanders held the floor for 8 1/2 hours on Friday in a filibuster against the bill, labeling the measure "tax breaks for billionaires."
On Monday, the tax cut bill, officially titled the Middle Class Tax Relief Act of 2010, overcame a procedural hurdle with an 83-15 vote in the Senate.
The bipartisan compromise, announced last week by President Obama, will extend tax cuts for both the middle class and upper-income earners. Previously, Obama expressed his opposition for extending tax cuts for families making $250,000 or more, but said his priority was ensuring that taxes did not go up for the middle class on Jan. 1.
The bill also extends unemployment benefits for 13 months, provides incentives for companies to buy new equipment, and cuts the payroll tax by 2 percent, adding to employees' take-home pay.
The measure would also include a 35 percent estate tax after the first $5 million for an individual or $10 million for a couple.
"It is not their intention to only make this extension for two years," Sanders said, adding that the tax cuts would amount to a $100,000 tax break for people making more than $1 million per year. "We shouldn't be doing that," he said. "People on top are doing phenomenally well."
Republican senators praised the tax cut measure.
"Advocating against this proposal today is no different than advocating for high taxes," said Sen. John Thune, R-S.D., in a floor speech.
"It is long past time that we should have told the American people...what the tax policy is going to be for the next two years," said Sen. Kay Bailey Hutchinson, R-Texas. Hutchinson argued that businesses could not purchase new equipment or hire new employees without knowing next year's tax structure.
"You're not going to make the decision if you don't know what your [tax] commitments are going to be," she said. "What people in business want is predictability."
Hutchinson also advocated for getting rid of the estate tax. Under the current bill, estates valued at more than $5 million would be taxed 35 percent. Sen. Johnny Isakson, R-Ga., argued that the tax would force families to sell family land and businesses. "Five million is not a lot for a farm or small business," Isakson said.
Isakson agreed with Hutchinson that the debate in the Senate was coming too late, forcing lawmakers to make policy "under duress."
"Two year renewals, two year incremental sunsets ... are not good for the economy," he said.
Sen. Kent Conrad, D-N.D., characterized the estate tax provisions in the bill as "overly generous tax deductions to the wealthiest," but added, "I understand that the president did what he had to do to get an agreement."
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