Senate moves tax cut deal forward

President Barack ObamaBarack Obama unveiled a compromise deal on the tax cuts last week
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The US Senate is expected to open debate on the tax cut deal negotiated between President Barack Obama and the Republicans.

The $858bn (£545bn) package would extend Bush-era tax cuts on even the wealthiest Americans.

Backers expect the Senate to move debate forward before a final vote on Tuesday or Wednesday. It would then go to the House of Representatives.

Ex-President Bill Clinton has urged reluctant Democrats to back the plan.

“I don’t believe there is a better deal out there,” Mr Clinton said following a private meeting with President Obama on Sunday.

‘Eat their spinach’

Under a proposal that the White House crafted with Republicans and announced last week, tax cuts enacted by President George W Bush in 2001 and 2003 and set to expire this year would be extended at all levels – including for the wealthiest Americans.

Some unemployment benefits would also continue, and the estate tax would be lowered.

Mr Obama and his Democratic allies had vigorously opposed allowing low tax rates for wealthy Americans to continue at a time of massive budget deficits, but Senate Republicans rejected Mr Obama’s preferred approach and the president said he saw no option other than compromise.

Negotiations have been continuing since Democrats in the House of Representatives voted on Thursday to reject the initial tax cut deal.

A leading Senate Democrat, Dick Durbin said Democrats should “eat their spinach” and accept a deal because their influence will plummet when the new Congress convenes next month.

Republicans made big gains in November’s mid-term elections, winning control of the House as well as extra Senate seats.

Representative Chris Van Hollen, a key House Democrat, said on Sunday: “We’re not going to hold this thing up at the end of the day.”

But Mr Van Hollen told Fox News Sunday that Democrats wanted a separate vote on the inheritance tax provision in the bill – which he said would cost $25bn for just 6,600 wealthy Americans.

This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.

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