TAX BILL ON ITS WAY TO OBAMA

Nancy Pelosi said John Boehner's party had extracted a 'king’s ransom' in Obama's tax-cut deal. (AP Photo)

Washington, N.Y.-- A tax-cut compromise between President Barack Obama and congressional Republicans cleared the House around midnight Thursday, sending the $858 billion bill to the president’s desk.

"This deal comes at a terrible price because it rewards obstructionists with huge tax breaks for the nation’s richest and throws away precious resources we could use to revive our economy," AFL-CIO President Richard Trumka said.

Congressional Republicans have shown themselves to be morally bankrupt, Trumka said. Writing in Huffington Post, Trumka says :

While desperately poor families are forgoing Christmas this year—prompting children to pen “Dear Santa” letters that ask for basics like boots, coats and money for electricity bills—Republicans fought tooth-and-nail for a gilded gift basket of income tax cuts worth $120 billion for America’s super-rich, and a new estate tax exemption would let off all but America’s 50 wealthiest families so their pampered children can keep more of their millions.

AFL-CIO president
Richard Trumka
(photo by Bess Watts)

Trumka added, "Let’s call these the cut-and-run Republicans, who cut taxes and run from responsibilities."

The bill, which passed 277-148, provides a two-year extension for all tax cuts that were due to expire Dec. 31 — including for families earning more than $250,000 a year — and extends unemployment insurance benefits for next 13 months. It also sets estate tax rates at 35 percent, with an exemption on the first $5 million.

The House vote wasn't as close as expected, with 139 Democrats joining 138 Republicans to approve the bill. The Senate passed the bill comfortably as well Wednesday, 81 to 19.

The bill represented a major shift for Obama, as he abandoned an oft-repeated campaign promise that he would end the policy of cutting taxes for the wealthy. But the House Republican landslide in the midterm elections — a “shellacking,” Obama called it — forced the president to cut a deal so middle-class families didn’t see a tax hike on his watch, even though it infuriated his liberal base.

The political gamble has paid off for Obama, at least in the immediate term. Polls show the deal is widely popular with Americans, and it has allowed Obama to put space between himself and the liberals in his party — not to mention congressional Democrats. He has opened an avenue to portraying himself as the reasonable consensus-builder that he promised to be in the heart of his 2008 campaign, something his team seems eager to do after two bruising years marked by the messy fight over health care.

The bill also will be one of the final pieces of legislation taken up by the Democratic majority led by House Speaker Nancy Pelosi (D-Calif.), a champion of the left. And its passage provided a remarkable scene of Pelosi railing against a bill that her majority was powerless to defeat — from the very same spot where she had presided over Obama’s earlier legislative triumphs, health care reform and a crackdown on Wall Street.

She said Republicans had extracted a “king’s ransom” in exchange for support of middle-class tax cuts. “I’m sorry [for] the price that has to be paid by our children and our grandchildren to the Chinese government to pay for the increase in the deficit that the Republicans insisted upon,” Pelosi said in closing.

At the same time, it is one of the best bills for congressional Republicans in years, as they prepare to take the House majority for the first time since 2006.

Still, some of the most popular conservatives in the House did not support the bill, generally citing cost concerns and immediately setting themselves apart from other elected Republicans. The bill generated opposition from GOP presidential contenders such as Sarah Palin and Mitt Romney, as well as some tea party groups.