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House to Debate on Year-End Tax-Cut Compromise

Republicans are ready to whip a year-end tax-cut compromise through the House as Congress prepares to finish 2015 in a flurry of accomplishment that belies the partisan collisions sure to dominate the coming election year.

Though House Minority Leader Nancy Pelosi was leading a Democratic charge against the tax measure, GOP leaders seemed certain to push it through the chamber Thursday. That would set the stage for House passage Friday of a companion bill providing $1.1 trillion to finance government in 2016, leaving only Senate action before the 2,200-page bundle is shipped to President Barack Obama for his promised signature.

Though the tax bill would mostly renew scores of existing breaks that have lapsed or are about to, its scope was impressive and its victories distributed to Republicans and Democrats alike.

Tax credits for college expenses, child costs and lower-earning families would be made permanent, as would cuts for companies that do research or buy equipment. Also made permanent or at least extended were reductions for some charitable contributions, builders of energy-efficient homes, producers of Puerto Rican and Virgin Islands rum and owners of auto race tracks.

"I'm excited about this huge win for families, for job creators, for certainty for our economy," said House Speaker Paul Ryan, R-Wis.

Coupled with tax provisions House leaders stuffed into the spending bill to attract votes, the legislation would cost the government an estimated $680 billion over the next decade. That would pump federal deficits over that period, already projected to total an astronomical $7 trillion, even higher.

"It's a significant tax relief measure and of course you know how Republicans like to cut taxes," Senate Majority Leader Mitch McConnell, R-Ky., told The Associated Press.

As if they needed more encouragement, Republicans said the tax bill would make revamping the entire tax code next year easier by clearing those extensions out of the way now. GOP leaders hope to produce tax and health care overhaul measures next year, fully expecting vetoes but savoring the campaign-season opportunity to fire up conservative voters.

Democrats complained that the tax bill was unbalanced, dispersing 60 percent of its permanent reductions to business and just 40 percent to families.

Pelosi, D-Calif., called that disparity "practically an immorality." Michigan Rep. Sander Levin, top Democrat on the tax-writing House Ways and Means Committee, said pumping up federal deficits would make money scarcer for domestic programs. "This is too high of a price to pay," Levin said.

But Democrats were divided over the budget deal. Senate Minority Leader Harry Reid, D-Nev., pronounced the budget agreement "a good compromise," and the White House wrote in a letter expressing support for the accord that it would "help to grow the economy and build middle-class economic security."

Tucked into the two bills were provisions trimming some of the taxes that help pay for Obama's prized 2010 health care overhaul, rollbacks the White House opposed but Republicans and many Democrats savored. A tax on medical devices would be suspended for two years, a levy on health insurers would stop for one year and in a win for unions a tax on higher-cost insurance policies would be postponed two years until 2020.

Democrats tried but failed to block GOP language restricting federal reimbursements to insurers losing money on federal and state exchanges where people buy coverage, a provision many say has helped destabilize some markets.

For Republicans, their biggest win in the bills was the end of the four-decade ban on U.S. crude oil exports. The industry said lifting that prohibition would create jobs and lower gasoline prices — outcomes that opponents said were flat-out wrong.

In exchange, Democrats won extensions of tax breaks for alternative power sources like solar and wind energy.

The tax bill also takes a shot at the Internal Revenue Service, which Republicans have not forgiven following its admission that it subjected conservative groups seeking tax-exempt status to unfairly tough investigations. The measure makes it easier for people to get information from the IRS about their cases and for groups to appeal agency decisions against them. 

Copyright AP - Associated Press
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