Bipartisan tax plan will cost $857 billion over 10 years, say estimates

story by The Hill
written by Vicki Needham

The tax plan brokered between the White House and Senate Republicans will cost add $857.8 billion to the deficit over 10 years, according to the Joint Taxation Committee's and Congressional Budget Office's scores of the legislation.

The measure, which comes up in the Senate for its first vote Monday, would cost more than the $787 billion economic stimulus bill passed in February 2009.

The score of the bipartisan tax legislation shows a loss of $721 billion in revenue over the next decade.

The 13-month extension of unemployment benefits including in the package adds about $56 billion to the deficit.

To extend all the Bush-era tax cuts from 2001 and 2003, including the income tax rate changes, capital gains, dividends other tax breaks included in the 2009 economic stimulus will cost more than $407 billion over 10 years, according to estimates released by the JCT.

In addition, the two-year patch for the alternative minimum tax will cost $136 billion, the estate tax of a 35 percent rate with an exemption up to $5 million will cost $68 billion and the one-year two percentage points reduction of the payroll tax for employers has an estimated cost of $111.6 billion, the JCT estimates showed.

House Democrats expressed angry opposition to the proposal over the extension of tax rates for higher income earners and the estate tax deal, among other issues.

Vice President Joe Biden made two trips to Capitol Hill during the week to sway skeptical Democrats, saying the deal was done and few changes would be accepted.

House Majority Leader Steny Hoyer (D-Md.) has said the House would wait and see what the Senate produced before determining whether they would push for additional changes.

Senate Republicans including Minority Whip Jon Kyl (R-Ariz.) said no changes to the estate tax would be accepted.

The main addition to the bill is a one-year extension of a program that provides cash grants in lieu of a tax credit for the construction of new solar and wind energy projects, which was part of the 2009 economic stimulus bill, at an additional cost of $2.9 billion, according to the JCT estimate.

Some House Democrats, including Rep. Richard Neal (Mass.) had supported the addition of language that encouraged energy projects.

The Senate will vote on 3 p.m. Monday to move to the bill. House and Senate Democratic leaders are aiming to complete their work by Friday.