WASHINGTON — House members voted 234 to 188 Thursday for a bill that would extend lower- and middle-income tax cuts and make permanent two school bond-related provisions that were adopted in 2001 but are set to expire this year.

The Middle Class Tax Relief Act, sponsored by House Ways and Means Committee chairman Sander Levin, D-Mich., now goes before the Senate, but sources do not hold out much hope for passage because Republicans want all of the George W. Bush-era tax cuts extended for all income levels. 

“Republicans wanted to keep middle-income tax cuts hostage, to combine them with tax cuts for the wealthiest few, but today we freed millions of middle-income families from this hostage situation,” Levin said in a release. “I urge my colleagues in the Senate to follow suit and pass this tax relief immediately.”

The bond-related provisions that were made permanent had been adopted as part of the Economic Growth and Tax Relief Reconciliation Act of 2001.

One would increase the exemption from arbitrage rebate requirements to $15 million from $10 million for issuers who issue $15 million or less of bonds in a year and use $10 million of them to finance public school construction expenditures.

The other provision would allow tax-exempt private-activity bonds to be issued in states in amounts up to $10 per capita for elementary and secondary public school facilities owned by private, for-profit corporations but operated by public educational agencies under public-private partnership agreements that meet certain criteria.

Muni market participants were not concerned the bill was silent on extending the Build America Bond program, with several pointing out that the House has already passed tax legislation with such an extension twice in recent months.

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