Reid Vows Another Vote on AMT Patch

U.S. Senate Majority Leader Harry Reid on Tuesday promised to hold another vote on a measure to ensure that 20 million middle-class taxpayers don't fall into an expensive, alternative tax category.

The U.S. House of Representatives and the Senate have been tangling over the alternative minimum tax, which threatens to ensnare even more taxpayers because the 1969 requirement wasn't indexed for inflation. The Senate earlier this month approved a $51 billion cut to the AMT, after Democrats acquiesced to Republican demands to abandon pay-as-you go rules.

But the fiscally conservative House Blue Dog coalition has protested by voting against adjourning for the year. Amid the renewed discord, Reid, D-Nev., yielded and promised another vote.

"As I was walking out of my last meeting, I asked floor staff to come up with a consent to allow a vote on the bill that has already been defeated," Reid told reporters.

"We'll take it up again," he said. "That would be a fully paid-for AMT."

Earlier in December, Senate Republicans held ranks in December to block legislation that would have paid for an AMT fix. The Senate then passed another version that doesn't offset costs and on Monday sent it to the House, trying to force the chamber to accept the measure. That riled the fiscally conservative Democrats, who earlier on Tuesday were threatening to go home without patching up the AMT.

"We may not get a fix," said Rep. John Tanner, D-Tenn., a founding member of the coalition. "I think we can convince the American people that the reason we didn't get a fix is because of the unreasonable and obstinate position" of Republicans and the White House.

The alternative minimum tax was created in 1969 to make sure that the wealthiest taxpayers paid at least a minimum of taxes. But because the AMT wasn't indexed for inflation and because regular income-tax rates have been cut so much in recent years, the number of taxpayers subject to the AMT has grown substantially.

Congress has enacted a series of AMT patches since 2001 to prevent millions of upper-middle and upper-income families from entering the AMT rolls. Extra taxes imposed by the AMT, compared with the regular income tax, average around $2,000 a year, according to Congress's tax-writing committees.