The U.S. Senate has overwhelmingly approved a sweeping federal tax bill that will swell America’s national debt by hundreds of billions of dollars and, it is hoped, stimulate a lagging U.S. economy. Attention now shifts to the House of Representatives, where some Democrats want to alter the tax deal struck between President Barack Obama and congressional Republicans.
In a rare show of bipartisanship, the Senate voted 81 to 19 to extend existing federal tax rates for all income levels. Those tax rates are set to rise beginning next year — an outcome neither party wants at a time of chronic economic weakness. The bill also extends federal jobless benefits, limits inheritance taxes on multi-million-dollar estates, and trims worker payroll contributions to Social Security. The bill would increase spending and shrink revenue, sharply boosting federal indebtedness over the next two years.
A common refrain from liberal and conservative senators alike: The tax deal is flawed, but better than doing nothing.