The Senate voted 55-44. The House voted 244-185 in favor of the measure Wednesday.
The bill keeps the capital gains tax rate at 15 percent and prevents the alternative minimum tax from ensnaring those earning in the $160,000 range. It also extends Roth IRAs to upper-income savers.
Before the vote, California Sens. Barbara Boxer and Diane Feinstein, both Democrats, argued strenuously against the measure -- Boxer calling it "ill-advised" and Feinstein calling it inequitable. They said at a time of ballooning deficits and more than $1 trillion in federal debt, tax cuts should be the last thing Congress enacts.
"At a time when most Americans are struggling to meet the cost of living, we should be taking targeted steps for those that need it most," Feinstein said. "We're not doing that."
Sen. Judd Gregg, R-N.H., justified the measure by saying taxpayers earning more than $185,000 annually pay 65.7 percent of U.S. income taxes and therefore deserve the bulk of the benefits from the measure, not those at the bottom of the income charts.
Sen. Charles Grassley, R-Iowa, argued the measure is not a tax cut bill. Rather, it simply prevents the tax cuts enacted in 2003 from expiring and raising everyone's taxes, he said. Sen. Trent Lott, R-Miss., said instead of rejecting tax cuts, Congress should reform entitlement programs to keep the budget in check.
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