US & Canada

US tax cuts: Senate moves Obama deal toward passage

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Media captionPresident Barack Obama unveiled a compromise deal on the tax cuts last week

The tax cut deal negotiated between President Barack Obama and the Republicans has passed a key test vote in the US Senate, opening it up for final voting later in the week.

The $858bn (£545bn) package would extend Bush-era tax cuts for all Americans, including the wealthiest.

The deal gained 62 votes in the Senate - pushing it toward a final vote, which is expected on Tuesday or Wednesday.

If the measure passes, it will then move to the House of Representatives.

"I urge the House of Representatives to act quickly on this important matter," Mr Obama said at a press conference on Monday.

Mr Obama called the round of voting on Monday a "substantial victory for families", adding that he understood objections some lawmakers might have to the deal.

"I share some of them, but that's the nature of compromise, sacrificing something that each of us cares about," he said.

Former President Bill Clinton has also 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 Mr Obama on Sunday.

Indications of bipartisan support in the Senate suggested the tax deal would probably pass the next round of voting and soon reach the floor of the House, analysts said.

'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.

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