The Tax Capitulation Act was not debated in the House as scheduled today. Democratic progressives, led by Oregon’s Peter DeFazio defected on a key procedural vote that would have prevented them from offering substantive amendments. This ‘bipartisanship’ (see graphic) is killing us!

The bill to temporarily extend tax cuts and jobless benefits is on ice — for now — in the House.

House Democratic leaders have pulled the rules for debate, which first have to get approved before lawmakers can take up the tax legislation. A party caucus meeting is set for this afternoon.

Many liberals in the Democratic caucus are upset at the bill’s provision on estate taxes and want to amend the measure and send it back to the Senate. The problem is that Democrats would have to vote on the Senate-passed bill if they want to change the estate tax provision.

The deal worked out by President Obama and congressional Republicans would extend for two years tax cuts enacted in 2001 and 2003 for all income levels. Liberals such as Rep. Peter DeFazio, D-Ore., are upset that the extension includes families earing more than $250,000.

Under the bill, couples would be allowed to pass up to $10 million onto their heirs tax free. Estates above that would be taxed at 35%.

A deal is being worked out, according to DeFazio, that would allow liberals to offer an amendment that would change the estate-tax provision so that estates up to $7 million would be tax free for couples, with anything above that amount taxed at 45%.

That amendment also would include a plan by Rep. Anthony Weiner, D-N.Y., to get rid of the 2% cut in payroll taxes in the bill, which some opponents believe would undermine Social Security. It would be replaced by a new infusion of the "Making Work Pay" tax credit of up to $400 for individuals and $800 for families that Obama included in last year’s massive economic stimulus package. Also, liberal Democrats want to include a $250 relief payment to seniors… [emphasis added]