Senate Approves Obama-GOP Tax Cuts Bill

Senate Approves Obama-GOP Tax Cuts Bill

The Senate approved the big tax cut package that President Obama and congressional Republican leaders negotiated, voting 81-19 to send the measure to the House.

The package, which is estimated to cost nearly $900 billion, keeps current Bush-era tax cuts in place another two years, extends jobless benefits for 13 months, gives businesses a 100 percent write-off against taxes in 2011 of their capital expenses, and reduces Social Security payroll taxes for most workers for a year.

Economists have said the legislation would inject a major amount of new stimulus that could speed up the U.S. recovery, and perhaps take pressure off the Federal Reserve to create new money through its controversial purchases of long-term bonds.

The package includes renewals of some transportation-related tax breaks that expired at the end of 2009, particularly a credit for track work by small railroads and a $1 per gallon credit for biodiesel production.

So far at least, the measure does not contain the Build America Bonds that were created in the 2009 stimulus law and have been extensively used by states, local governments and other public entities. The taxable bonds enjoy a 35 percent federal subsidy for interest costs and are used to finance public infrastructure construction including highway and bridge projects.

The House is expected to try to amend some parts of the legislation. If it makes any changes the legislation would have to return to the Senate for final action.

-- Contact John D. Boyd at jboyd@joc.com.