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Tax Cut Bill Gains 60 Votes in Senate

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AP
Updated 6:38 p.m. Eastern Time

President Barack Obama's tax deal with Republicans gained enough votes in the Senate on Monday to move forward to final passage as the White House charts an untested bipartisan course into the New Year.

The final vote total was overwhelming, with 83 Yeas to 15 Nays.

The unusual alliance of Obama and leaders of both parties in the upper chamber eased the tax deal over a first hurdle. It easily surpassed the necessary 60 of 100 votes needed to move the compromise to a final vote in the next few days.

"This proves that both parties can in fact work together to grow our economy and look out for the American people," the president said in a statement following the vote.

Passage in the House of Representatives, however, remained in question. Liberal Democrats voted last week to block the compromise deal from coming to a vote.

"Final Senate passage will take another day or two, and opposition is stronger in the House," said CBS Radio Capitol Hill correspondent Bob Fuss. "But this Senate vote will put enormous pressure on them to pass it too."

Senate Minority Leader Mitch McConnell (R-KY) called on House Democrats not to change the bill in a statement following the vote.

"If the House Democratic Leadership decides to make partisan changes, they will ensure that every American taxpayer will see a job-killing tax hike on January 1st," he warned.

The tax deal moved forward as Congress winds down a final session before the Democrats cede their majority to Republicans in the House of Representatives in the next Congress. It convenes in early January.

The Senate will remain under Democratic control, but the president's party will hold a much diminished majority.

It was that reality, the result of a Republican landslide in congressional elections last month, that prompted Obama to strike the tax deal with Republicans.

The deal marks a test of how Obama will manage to govern without his party in control of both houses of Congress. His readiness to reach accommodation with the opposition party likely will set a pattern for the final two years of his term.

"I recognize that folks on both sides of the political spectrum are unhappy with certain parts of the package and I understand those concerns," the president said following Monday's vote. "I share some of them. But that's the nature of compromise. Sacrificing something that each of us cares about to move forward on what matters to all of us. Right now, that's growing the economy and creating jobs. And nearly every economist agrees that that is what this package will do."

The bipartisan show of support is a strong indication the measure will be passed and sent to the House, possibly as early as Tuesday.

The bill provide a two-year reprieve in the tax increases that are scheduled to take effect on Jan. 1 at all income levels. It also reduces Social Security taxes for every wage earner in 2011 and extends an expiring program of jobless benefits for the long-term unemployed.

Midwestern lawmakers had difficulty getting back from their home states owing to the major snowstorm that has grounded more than 1,000 flights. The vote was held open as they returned to the capitol.

Appearing on CBS News' "Face the Nation" Sunday, White House Senior Adviser David Axelrod predicted passage for the deal.

"This is going to help our economy move," Axelrod told host Bob Schieffer. "All economists who have looked at this have said this will put a real charge into the economy."

The White House is expressing optimism, even though the Democratically-controlled House refused to bring the measure up for a vote in protest.

"Everybody understands what it would mean for the economy if we don't get this done," Axelrod said Sunday.

While many House Democrats have criticized the tax deal, Axelrod said he didn't foresee "major changes" being made by the House.

At the insistence of Republicans, the plan includes a more generous estate tax provision: The first $5 million of a couple's estate could pass to heirs without taxation, and an additional $5 million for the spouse. The balance would be subject to a 35 percent tax rate.

That provision infuriated Democrats who are already unhappy with Mr. Obama for agreeing to extend the Bush-era tax cuts for incomes of more than $200,000 for individuals and $250,000 for couples, and who say the tax breaks will unnecessarily add to the rising federal deficit.

In all, the package would cost about $855 billion, according to a preliminary congressional estimate.

The No. 2 Senate Democrat, Dick Durbin of Illinois, said a "good cross-section" of senators in his party are ready to accept the deal.

But the independent Senator from Vermont, Bernie Sanders, spent 8 and 1/2 hours railing against it on the Senate floor on Friday.

"It's Robin Hood in reverse," he said.

Behind closed doors, Democrats who are firmly against provisions (like the reduction in the estate tax rate) are getting sweeteners added.

Among the additions: A tax credit for renewable energy and green jobs; tax relief for mass transit; a tax deduction for elementary and secondary school teachers; and tax benefits to landowners who set aside their property for conservation.

Not all Democrats are on board with the add-ons.

"We shouldn't add to the cost of the bill - it's already too big already," said Rep. Peter DeFazio, D-Ore. "I mean, we were heading towards a $1.3 trillion deficit next year. Add this on, and we're up to a $1.75 or $1.8 trillion, one-year deficit."

On "Face the Nation," Rep. Jerrold Nadler, D-N.Y., said the cost of extending the Bush tax cuts for the highest income levels and raising income exempt from the estate tax "really sacrifices the welfare of the country long-term."

Maryland Rep. Chris Van Hollen, a member of the Democratic leadership who represented the House in negotiations with the administration, made clear that Democrats strongly object to extending breaks to estates as large as $5 million. He said the package will be taken up in the House in some form, but there would be an effort to change the estate tax provision.

"We're not talking about blocking the whole thing," Van Hollen said.

The president pushed the House to make sure the bill gets passed one way or another on Monday.

"I urge the House of Representatives to act quickly on this important matter," he said.