Congressmen Jerry McNerney, D-Pleasanton, and Pete Stark, D-Fremont, were among 26 House Democrats who broke from the party pack today to oppose H.R. 4154, Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009.

The bill, which passed on a 225-200 vote, would prevent the federal estate tax from expiring on Dec. 31, extending it indefinitely at a top rate of 45 percent and permanently exempting couples’ fortunes of up to $7 million, according to Bloomberg News. Congress in 2001 decided to drop the estate tax in 2010 before reinstating it in 2011 at the previous higher top rate of 55 percent for estates valued at more than $1 million.

McNerney issued a statement saying family farmers and small business owners should’ve been exempted, and the bill should be indexed to inflation so there’s not an increase each yaer in the number of farms and small businesses affected.

“California’s family farmers and small business owners need real reform that lifts the devastating burden of the estate tax, not a tax increase at a time when our economy is struggling,” McNerney said. “Unfortunately, today’s legislation represents a flawed attempt at reform. The bill offered would harm many family farms and small businesses in our area, costing jobs and damaging the local economy.”

McNerney last month introduced the competing H.R. 4015, Family Farm and Small Business Tax Relief Act of 2009, which he said would permanently exempt from the estate tax farmland that remains in operation and is passed down from one generation to another; would exempt small businesses worth up to $8 million; and is indexed to inflation.

“This was an opportunity for real reform, but instead the proposal passed today was a watered down approach. I’m going to keep fighting for the legislation I introduced and estate tax reform that benefits family farmers and small businesses owners,” McNerney said.

Stark’s nay vote was for markedly different reasons, according to his statement on the House floor:

“Madam Speaker, I rise in opposition to the permanent extension of the 2009 estate tax. The American people have more pressing concerns. Our priority should be to create jobs, enact health reform, and extend unemployment insurance and COBRA assistance, not provide gifts for the wealthiest 7000 Americans.

“I favor a one-year extension of current law, and then we can consider the estate tax in the context of all of the expiring Bush tax provisions. This provision should not be given priority over helping those who can’t find affordable health coverage or have lost their home or their job.

“Now is not the right time for this legislation. Let’s pass a one-year extension and get back to the issues that are truly important to the American people—creating jobs and assisting struggling families. I urge a no vote.”