 The White House and key lawmakers cleared the way Thursday night for swift Senate action to avert a Jan. 1 spike in income taxes for nearly all Americans, agreeing to extend breaks for ethanol and other forms of alternative energy as part of the deal. In a closed-door gripe session, they chanted "Just Say No," capping a remarkable day of political theater before passing a nonbinding resolution that said the tax agreement shouldn't be considered in the House unless changes were made. White House Press Secretary Robert Gibbs said he still believed the agreement would pass this year without substantial changes. As announced by Obama on Monday, the deal would extend tax breaks at all income levels that are due to expire on Jan. 1, renew a program of jobless benefits for the long-term unemployed that is due to lapse within days and implement a one-year cut in Social Security taxes. It also includes a one-year extension of a 45-cent-a-gallon tax credit for fuel made from ethanol, a provision sought by farm-state lawmakers. In the Senate, the emergence of bipartisan legislation also indicated progress for the White House and Senate Majority Leader Harry Reid, D-Nev., toward possible year-end passage of other major items on their agenda. Rep. John Boehner of Ohio, in line to become House speaker when Republicans take power in January, "supports the framework as agreed to by" Obama and McConnell and spoke with the president about it over the weekend, a spokesman said Thursday. Under the 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. House Democrats continued to voice opposition to a tax deal between the White House and Republicans on Thursday and urged leaders not to bring the agreement up for a formal vote. House and Senate Democrats debated privately in the weeks before the elections whether to hold votes on the issue.
– The Senate voted to begin debate on a bill based on Barack Obama’s tax cut deal last night, with the final vote expected to be held Monday. The Senate’s version of the bill will add $858 billion to the deficit over 10 years, the Wall Street Journal reports. Though the bill largely follows the White House outline, lawmakers tacked on an extension of subsidies for ethanol and alternative energy sources to sweeten the deal for Democrats. The previously-reticent Harry Reid is now behind the bill, and predicts it'll pass with nearly all Republicans and many Democrats supporting it. The House, on the other hand, is in open revolt; yesterday, in a closed-door session, Democrats were actually chanting “Just Say No,” as they voted against bringing the proposal to the floor. "If it's 'take it or leave it,' we'll leave it," one Democrat told the AP. But a Reid spokesman had this to say about the House: “This vote demonstrates they may be irrelevant to this process."