The $858 billion tax-cut deal moving through Congress will jolt life into the struggling U.S. economy over the next two years, but faces one more major hurdle first - passing the House of Representatives despite Democrats angry about its estate tax and Republicans upset about its mammoth deficit spending.
The Senate was expected to pass the deal overwhelmingly early Wednesday, drawing a breadth of bipartisan support previously unseen during Barack Obama's presidency. Next stop is the House, which could vote as soon as Wednesday and where eventual passage is expected despite reservations on all sides.
Economists figure the deal should boost economic growth by up to as much as a full percentage point in 2011 and lower the unemployment rate, now 9.8 percent, to as low as 8.7 percent by year's end.
The plan, negotiated by Obama administration and GOP officials, would extend all Bush-era tax cuts, first enacted in 2001 and 2003, for two years. It also would cut the Social Security payroll tax for workers by 2 percentage points next year and provide 13 months of jobless benefits for the long-term unemployed. And it would tax individual estates of more than $5 million at a 35 percent rate.
Leading economists have blessed the deal on grounds that it'll juice up the moribund U.S. economy - but just how much is debatable.
"The package would result in real GDP growth in 2011 of about 4 percent, and before the package we were expecting growth of about 3 percent," said Augustine Faucher, a director at economic forecaster Moody's Analytics.
Growth that strong would boost payrolls by 2.6 million jobs - twice as many as Moody's projected before the deal - and lower the jobless rate to 8.7 percent by year's end instead of staying stuck at 9.8 percent, Moody's calculates.
The biggest boost, Faucher said, wouldn't come from extending the tax rates now in place, but from extending unemployment benefits for the long-term unemployed, expanding some business tax breaks and the proposed one-year payroll tax holiday.
Extending the tax cuts for the wealthiest Americans, whose tax rate was set to jump on Jan. 1 by about three percentage points, won't translate into more consumer spending, according to economists, because the rich tend to save more. That doesn't mean, however, that there isn't benefit from retaining the lower rates for everyone.
The Senate was expected to pass the deal overwhelmingly early Wednesday, drawing a breadth of bipartisan support previously unseen during Barack Obama's presidency. Next stop is the House, which could vote as soon as Wednesday and where eventual passage is expected despite reservations on all sides.
Economists figure the deal should boost economic growth by up to as much as a full percentage point in 2011 and lower the unemployment rate, now 9.8 percent, to as low as 8.7 percent by year's end.
The plan, negotiated by Obama administration and GOP officials, would extend all Bush-era tax cuts, first enacted in 2001 and 2003, for two years. It also would cut the Social Security payroll tax for workers by 2 percentage points next year and provide 13 months of jobless benefits for the long-term unemployed. And it would tax individual estates of more than $5 million at a 35 percent rate.
Leading economists have blessed the deal on grounds that it'll juice up the moribund U.S. economy - but just how much is debatable.
"The package would result in real GDP growth in 2011 of about 4 percent, and before the package we were expecting growth of about 3 percent," said Augustine Faucher, a director at economic forecaster Moody's Analytics.
Growth that strong would boost payrolls by 2.6 million jobs - twice as many as Moody's projected before the deal - and lower the jobless rate to 8.7 percent by year's end instead of staying stuck at 9.8 percent, Moody's calculates.
The biggest boost, Faucher said, wouldn't come from extending the tax rates now in place, but from extending unemployment benefits for the long-term unemployed, expanding some business tax breaks and the proposed one-year payroll tax holiday.
Extending the tax cuts for the wealthiest Americans, whose tax rate was set to jump on Jan. 1 by about three percentage points, won't translate into more consumer spending, according to economists, because the rich tend to save more. That doesn't mean, however, that there isn't benefit from retaining the lower rates for everyone.
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