According to the House Republican leadership, “The bill will prevent almost all Americans from ever paying the estate tax.”

But, according to most congressional staffers and lobbyists, the bill faces a tough road in the Senate, where it is expected to be taken up Friday.

Democrats have successfully blocked action on such legislation in the Senate twice this year already.

Additionally, many Republicans, especially those on the Senate Finance Committee, are upset because House Republican members on a pension reform conference committee declined to show up last Wednesday for a session where a vote on a compromise pension reform bill, combined with provisions extending several popular tax cuts, was to be voted on.

Instead, the House took the combined bill, removed the tax break provisions, and attached it to a newly-devised estate tax reform plan before sending it to the House floor for action early Saturday.

The bill as passed by the House would, in addition to the estate tax relief, extend through 2007 a number of popular tax breaks, including the work opportunity tax credit, the research and development tax credit and the state sales tax deduction. The bill would also increase the federal minimum wage from $5.15 per hour to $7.25 over three years.

Under current law, the estate tax gradually declines until it is fully eliminated in 2010. However, in 2011, the tax returns in full force.

Specifically, the estate tax provision in the House bill increases the estate and gift tax exemption amount through a phase-in to $5 million per person effective January 1, 2015, and then indexes it for inflation.

The measure also reunifies the estate, gift and generation-skipping transfer taxes and reduces estate and gift tax rates.

Language in the bill says estates valued at up to $25 million (indexed for inflation) will be subject to tax at the capital gains tax rate (currently 15 percent, set to increase to 20 percent in 2011 unless extended).

Amounts in excess of $25 million (indexed for inflation) or more will be subject to a phased-in reduced rate of tax of 30 percent. The 30 percent tax rate is fully phased-in effective January 1, 2015.

The bill also makes portable the spousal estate and gift tax exclusion to allow married couples to take full advantage of the $5 million per person exemption amount (indexed for inflation) by carrying over any unused exemption to the surviving spouse, subject to the phase-in of the exemption amount.