WASHINGTON (CN) – Several Democratic senators voiced support this week for President Barack Obama’s tax proposal to extend Bush-era tax cuts across the board for two years. But House Democrats voted on a non-binding agreement opposing the compromise.
The Senate is expected to vote on the bill Saturday or early next week.
“I think the president did the right thing in compromising with Republican leadership,” Sen. Kent Conrad, D-N.D., said in a statement. “The economic analysis available to the president indicated that this package is necessary to strengthen economic growth next year. A failure to get an agreement on this overall package would have reduced economic growth in a very significant way, some economists say cutting it by about half in 2011.”
The measure also drew support from Democratic Sens. Michael Bennet of Colorado, Daniel Akaka of Hawaii, John Kerry of Massachusetts, Blanche Lincoln of Arkansas and Jim Webb of Virginia.
In contrast, House Democrats voted Thursday on a non-binding agreement, saying they opposed the compromise.
“In the caucus Thursday, House Democrats supported a resolution to reject the Senate Republican tax provisions as currently written,” House Speaker Nancy Pelosi, D-Calif., said in a statement. “We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote.”
Obama announced a framework agreement for extending tax cuts on Monday.
The agreement creates a two-year extension of the 2001 and 2003 Bush tax cuts for middle-class families earning $250,000 or less per year and upper-income earners making more than $250,000 per year.
Obama says the compromise ensures that middle-class families did not see their taxes go up on Jan. 1. The proposal would prevent a tax increase of more than $3,000 for the typical family, the White House said.
“I’m not willing to let our economy slip backwards just as we’re pulling ourselves out of this devastating recession,” Obama said Monday. He said he still does not support permanently extending tax cuts for upper-income earners.
The proposal also includes a measure to extend unemployment insurance benefits through the end of 2011. Unemployment benefits are slated to expire for two million people at the end of December.
The agreement also includes a $120 billion payroll tax cut and a continuation of tax credits, as well as $56 billion in unemployment insurance.
The 2 percent cut in payroll taxes for workers is expected to amount to $1,000 in take-home pay to the typical family over one year.
Kerry said Obama was forced to make the call because he didn’t have 60 senators to oppose Bush tax cuts.
“He obviously decided that the best possible compromise was to get unemployment benefits, middle-class tax cuts and the Recovery Act provisions extended in exchange for these upper-income tax extensions that he opposes, and he decided that in two years the fight over tax breaks for the wealthy will be rejoined,” Kerry said in a statement.
Kerry added that the compromise was the only way to get Republicans to vote to extend unemployment insurance benefits.
“The truth is, the president got a lot of things here we’ve been fighting for that we haven’t yet been able to win any other way,” Kerry said.