ElderWeb

U.S. Senate on Friday voted to abolish estate taxes, and sent the bill to President Clinton, who pledged to veto it. The Senate voted 59-39 for the bill but supporters still lack the two-thirds majority needed to override a veto.

Voting in the Senate ran pretty much along party lines. Nine Democrats broke with the White House and joined the Republican majority to support the bill, and four Republicans joined the Democratic opposition. The House passed the bill in June, with 65 Democrats joining the Republican majority.

Clinton said the bill would benefit about 3,000 families a year. "While I am willing to support targeted and fiscally responsible legislation that provides estate tax relief for small businesses, family farms and principal residences, the estate tax repeal passed by the Senate is a budget-busting bill that provides a huge tax cut for the most well off Americans at the expense of working families." Clinton said he opposes big tax cuts until Congress acts to bolster Social Security, which faces financial strains when the baby boom generation starts to retire, and agrees to a prescription drug benefit for elderly Medicare health care recipients.

Republicans feel this issue could cause Democrats election-year discomfort, since public opinion polls that show a majority of Americans support repeal of the estate tax. The White House says repeal would cost the federal treasury $105 billion during the phase-out period and $750 billion during the decade after that.

Under current law, individuals get a $675,000 exemption, and that will eventually increase to a $1 million exemption. The new law would phase the tax out entirely over a ten year period.