The amendment would ratchet back the exemption on estates to $3.5 million from $5 million, and bring up the tax rate from 35 percent to 45 percent. That would raise about $10 billion more over the next two years, and affect about one percent of estates rather than 0.25 percent. It's much, much weaker than the estate tax that would lock into place if Congress simply does nothing. That version has a mere $1 million exemption, and a 55 percent tax rate.

But it's not just the estate tax. In the campaign, President Obama promised that taxes wouldn't rise for anyone making less than $250,000. That is to say, he conceded that the Clinton-era tax rates on 98 percent of Americans were too high, and the revenue the tax code is raising right now is about right. Democrats don't believe either thing, in large part because the economy and the budget have made it impossible to argue either thing. But they're too afraid of being accused of raising taxes to say otherwise, and so they've let their approach to taxes curdle into little more than an attack on the unpopular rich, totally losing hold of Clinton's efforts to make taxes a normal piece of responsible, pro-growth fiscal policy.

Top Stories

The Senate overwhelmingly passed the tax compromise, report Lori Montgomery and Shailagh Murray: "A far-reaching $858 billion tax plan negotiated by the White House and Republican leaders sailed through the Senate on Wednesday and was headed for a vote Thursday in the House, as lawmakers rushed to prevent a New Year's tax hike from striking virtually every American household. After a decade of partisan sniping over tax breaks enacted at the dawn of the George W. Bush administration, the Senate overwhelmingly approved a plan to extend them beyond Dec. 31, voting 81 to 19 to keep the cuts in place for families at all income levels for another two years. Prospects for House passage also appeared to be brightening, as lawmakers acknowledged the need to avoid expiration of the Bush tax cuts and the likely shock to the economy that would result."

The House will vote on an amendment to alter the estate tax provisions of the tax deal before voting on the final deal today: http://bit.ly/fpRiwW

But the amendment they're voting on isn't very different than the language that's already in the bill: http://wapo.st/gsSn1j

Obama used a meeting with CEOs to press for increased hiring, reports Elizabeth Williamson: "President Barack Obama pressed 20 corporate chief executives Wednesday to suggest policies that would spur them to "start investing in job creating enterprises." The private meeting at Blair House, across the street from the White House, was part of an administration effort to repair relations with corporate America, which have been battered by disagreements over policy and presidential rhetoric...The White House has been pursuing a charm offensive with the biggest U.S. employers in recent weeks, hoping to convince them to plow some of the $2 trillion in cash they are sitting on into expansion and hiring in the U.S."

The US has secured a number of trade concessions from China, reports Howard Schneider: "China has agreed to lift its extensive limits on the import of U.S. beef, lower restrictions on imports of wind turbines and telecommunications equipment, and take an array of other steps that U.S. officials say could lead to a substantial boost in U.S. exports to the world's second-largest economy. After two days of high-level talks, U.S. and Chinese officials unveiled a set of agreements Wednesday that address some of the core trade grievances raised by U.S. firms that do business - or want to - in the fast-growing Chinese economy."

'90s alt-rock interlude: PJ Harvey plays "To Bring You My Love".

Still to come: Republican members of the financial crisis commission want to avoid blaming Wall Street; health care lawsuits will likely shake out on party lines; the tax deal contains billions in industry subsidies; the Justice Department is suing BP for its culpability in the Gulf oil spill; and a ladybug plays with sprinkles.

Economy

Republican members of the Financial Crisis Inquiry Commission are blaming housing policy, not Wall Street, for the financial crisis, report Zachary Goldfarb and Brady Dennis: "Republicans on a congressionally appointed panel studying the causes of the financial crisis largely blamed federal housing policy in a brief paper Wednesday that highlighted how differently the right and the left view the origins of the crisis. Splintering from their Democratic counterparts, the four GOP members of the Financial Crisis Inquiry Commission pointed the finger at politicians in Washington for promoting lax mortgage lending standards that allowed lower- and moderate-income people to buy homes beyond their means."

Shahien Nasiripour lists some of the words you won't find in the report: "All four Republicans voted in favor of banning the phrases 'Wall Street' and 'shadow banking' and the words 'interconnection' and 'deregulation' from the panel's final report."

Download the report: http://bit.ly/ePkoB3

The World Bank is pledging $50 billion in aid to poor countries, reports Howard Schneider: "Officials meeting in Brussels this week agreed to contribute nearly $50 billion over the next three years to the World Bank fund dedicated to the globe's poorest countries. The 18 percent boost marked the arrival of some previous aid recipients as donors. World Bank President Robert Zoellick said he could not provide details on individual donors until the World Bank board approves the funding package early next year. The United States pledged $3.7 billion in the last funding round, negotiated in 2007. Treasury Department officials would not release the amount of the latest U.S. pledge."

Some Republicans are voting against their own earmarks, report Philip Rucker and Paul Kane: "The spending bill also contained earmarks totaling $30.2 million sponsored by Sen. Bill Nelson (D-Fla.), who swore off earmarks last month...Sens. John Cornyn (R-Tex.) and John Thune (R-S.D.), who sponsored an estimated $15.7 million and $38.5 million worth of earmarks in the bill, came under sharp questioning Wednesday when they staged a news conference to condemn the practice. 'Earmarks are a symptom of wasteful Washington spending that the American people have said they want reformed,' Cornyn told reporters. 'We agree with them, and that's why we will vote against this bill.'"

Cutting payroll taxes for employers could be more effective than cutting them for employees, writes Casey Mulligan: http://nyti.ms/f25SKu

Larry Summers, in aggregate, did well in his post, writes John Cassidy: "With the credit markets frozen and the economy in free-fall, the President-elect ignored the counsel of some of his campaign advisers and hired the controversial professor to guide him in the right policy direction. Did Larry do that?...Summers, for all his blemishes, has never pretended to be a politician or a political tactician. His job was to give the President economic advice and present the options available to him. This he did for two years. He made some mistakes and he failed to articulate an overarching narrative for Obamanomics, but on the defining question of the age--how to react to the financial crisis of 2008--Summers got things largely right. For this, at least, we owe him some gratitude."

Insect interlude: A ladybug plays with sprinkles.

Health Care

Health care lawsuits highlight the influence of partisanship on court outcomes, reports Kevin Sack: "The two federal judges who have upheld the law were appointed by President Bill Clinton, a Democrat. Judge Hudson and Judge Vinson were appointed by Republican presidents -- George W. Bush and Ronald Reagan, respectively... Although the science is imprecise and often disputed, some scholars have found patterns of partisan divisions at all levels of the federal judiciary, based on the appointing president. At the district court level, there is generally a high degree of consensus among judges in similar cases, except when they confront polarizing constitutional questions like abortion, campaign finance and now health care."

Even states opposed to the individual mandate are aggressively implementing other parts of health care reform: http://politi.co/gUpnYL

If Social Security is any guide, health care reform will take years to become uncontroversial, writes Matt Bai: "The pattern here is perhaps best illustrated by Social Security. Franklin D. Roosevelt signed the program into law in 1935, but it didn’t begin to pay out benefits until 1941...Even as the political maelstrom raged, though, Social Security was slowly expanded to cover more categories of workers, and a generation of retirees began receiving their checks. 'It basically gets woven into the way employers are operating and people are planning,' says the political scientist Theda Skocpol, a Harvard professor who has written extensively on the history of American social policy. 'People didn’t get used to the benefits to which they were entitled until the ’50s.' By that time, political support for the program was no longer in doubt, and Republican opponents had little choice but to desist."

Exchange systems might be able to solve the organ transplant shortage, writes Annie Lowrey: http://slate.me/e5jlMQ

Domestic Policy

The tax deal includes $55 billion in subsidies for specific industries, reports Dan Eggen: "U.S. technology companies such as Microsoft would continue to benefit from a tax credit for research and development carried out in the United States, costing taxpayers about $6 billion. Rum-makers in Puerto Rico and the U.S. Virgin Islands would get another two-year extension of excise tax credits for their products ($235 million), while movie and television producers would enjoy special deduction rules for U.S.-based projects ($162 million). Owners of NASCAR tracks and other motor-sports facilities would benefit from two more years of a tax policy making it cheaper for them to fund capital projects. Estimated cost to taxpayers: $40 million."

Executives at the White House summit called for net neutrality rules: http://politi.co/dLH2Lx

Giving parents control can fix failing schools, writes Arnold Schwarzenegger: "On Dec. 7, history was made by a small group of parents in Compton, Calif. Their children attend McKinley Elementary School - a school that has been defined as failing for the past 10 years. Using a new power known as the 'parent trigger,"' which I fought for and state legislators approved last year, these Compton parents banded together to demand change. The legislation allows parents of students at troubled schools to demand such significant reforms as closing a school, replacing a school's management or most of its staff, or reorganizing a school into a charter, if 51 percent of parents sign a petition. McKinley Elementary is being reorganized and will soon be transformed into a charter school run by Celerity Educational Group, which is successfully operating three other schools in California."

The House will allow iPads and other technology on the floor: http://politi.co/hqUJ2k

Adorable animals adjusting to seasons interlude: Cats fighting in the snow.

Energy

Fox News does not allow positive coverage of climate science: http://wapo.st/glkQxS

Detroit is prospering by selling gas-guzzlers, writes Edward Niedermeyer: "At General Motors, sales of actual cars this year have fallen by nearly 6 percent compared with last year’s anemic numbers, while light trucks (which include pickup trucks, S.U.V.’s, minivans and crossovers) are up by more than 16 percent. Despite rolling out the much-hyped Cruze compact and the Volt plug-in hybrid, G.M. still sells half again as many trucks and S.U.V.’s as it does cars. This year 73 percent of Chrysler’s sales have been light trucks...According to the Environmental Protection Agency, the Detroit automakers have three of the four lowest average fleet fuel economy ratings among full-line manufacturers, and none achieves the industry average of 22.5 miles per gallon."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.

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Dec. 16, 2010