“While we are disappointed that the most recent reform compromise could not be moved forward at this time, we will continue to work with Senate leadership as they attempt to move this very reasonable proposal forward in the near future,” Mr. Symington said.

He called the issue “too important to small-business owners across America to stop now when we are so close to a deal.”

The Permanent Estate Tax Relief Act of 2006 (H.R. 5638) was passed by the House June 22, on a 269-156 vote.

In his June 27 statement, Sen. Frist said, “Everyone should be clear: The Senate will vote on a permanent reduction to this tax–a tax that destroys small businesses and family farms.”

However, there is concern within Mr. Frist's caucus about the House bill. A compromise supported by Senate Republicans would cost $275 billion over 10 years.

But there are concerns among GOP lawmakers that it would not give credit toward federal estate taxes for state taxes on estates. Second, the rates paid above the threshold level under the House bill would be linked to the capital gains tax rate, now 15 percent.

The concern of Republicans is that when the 15 percent rate comes up for renewal in 2010, it would “poison the waters” for keeping the rate at 15 percent and not returning it to the old rate of 20 percent that existed before 2002.

The House bill would increase the exemption amount to $5 million per person effective Jan. 1, 2010, and it would reduce the tax rate on estates up to $25 million to the capital gains tax rate.