House votes to make current estate tax permanent

The House approved Thursday a measure making the current estate tax rate permanent, overcoming the objections of an unusual coalition of liberal and conservative critics.

The bill passed, 225 to 200, with 26 Democrats joining all Republicans present to vote no. It would make permanent the current estate tax rate of 45 percent, with an exemption of $3.5 million per individual. If Congress does not act, the estate tax would disappear altogether in 2010, then return in 2011 under the higher rates -- 55 percent and a $1 million exemption -- that existed before President George W. Bush took office.

The Senate faces a Dec. 31 deadline to address the issue, but it's not clear when that chamber will find the time to do so in the midst of its marathon health-care debate. It's also unclear whether the House's approach on the estate tax could garner the 60 votes necessary to move forward in the Senate.

Some Democrats in both chambers would prefer to see higher estate tax rates, arguing that the pre-2001 levels were fair and provided the government with much-needed funds. Making the current rates permanent will take a bite out of the federal treasury, with the government estimated to lose $234 billion in revenue over the next 10 years.