WASHINGTON — The White House and key lawmakers in both parties cleared the way Thursday night for swift Senate action to avert a Jan. 1 spike in income taxes for most Americans, agreeing to renew expiring breaks for ethanol and other forms of alternative energy.
Tax provisions aimed at increasing production of hybrid automobiles, biodiesel fuel, energy-efficient homes, coal and energy-efficient household appliances would be extended through the end of 2011 under the bill, according to a summary that circulated in Congress.
Officials said debate could begin on the measure within hours. There was no timetable for a final vote, but the decision to expand the scope of the original bill capped days of secret negotiations aimed at increasing support.
The events unfolded as the White House predicted that the deal President Obama struck with top Republicans would clear by year's end — even though House Democrats voted Thursday not to allow it to reach the floor without changes to scale back tax relief for the rich.
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"If it's take it or leave it, we'll leave it," said Rep. Lloyd Doggett, D-Texas, after a closed-door meeting in which rank-and-file Democrats chanted, "Just say no."
"The deal will get passed," said presidential press secretary Robert Gibbs. There were no predictions to the contrary among senior Democrats on either side of the Capitol.
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.
The two-year cost of the plan, estimated at as much as $900 billion, would further swell record federal deficits.
Despite the additional red ink, the president has said the plan is essential to add strength to an economy recovering slowly from the worst recession in eight decades. Joblessness stands at 9.8 percent, and a top White House official bluntly warned Democrats earlier in the week that they would bear responsibility for a return to recession if they blocked the measure.