By John Shaw

WASHINGTON (MNI) - Senate Majority Leader Harry Reid said Tuesday that the Senate will make "some" adjustments to the $113 billion package of tax cuts and benefit extensions that the House passed several weeks ago.

The Senate is now considering that tax and benefits legislation.

In comments to reporters after a Democratic policy luncheon, Reid said the Senate will make "very few changes to the House bill," adding that he believes the House will approve the Senate modifications to its package.

The overall plan, Reid said, is a "good jobs bill."

The package passed by the House two weeks ago would extend about a dozen tax cuts that expired at the end of last year, expand unemployment benefits, and provide a 19-month extension of current Medicare payments for doctors, the so-called "doc fix." The package would add about $54 billion to the deficit over a decade.

One of the changes the Senate will make to the House-passed bill is to increase Medicaid assistance to state governments.

A second modification will be to ease a tax hike on the carried interest earned by venture capitalists, real estate investors and private equity managers.

Under the House bill, 25% of carried interest would be treated as capital gains, as it is now, and 75% would be taxed as ordinary income, which is taxed at a higher rate. The Senate bill would change that ratio to 35-65 or, for assets held for more than seven years, 45-55.

Reid said that he would personally support an amendment to give a health insurance premium subsidy for unemployed workers under the COBRA program, a provision that was removed from the final version of the House bill because of its cost.

"Of course it's important," Reid said of the COBRA subsidy.

Speaking before Reid, Senate Minority Leader Mitch McConnell said that Republicans are worried about the deficit-increasing impact of the overall package.

"There is a growing feeling ... that these kind of packages ought to be paid for," McConnell said.

It is important, McConnell said, to "figure out a way to pay for this bill."

McConnell said he opposes a provision in the bill to increase the tax on oil companies by 26 cents per barrel to help pay for the overall bill.

He said the tax hike, if retained, should be allocated for the oil clean up trust fund, its intended purpose.

** Market News International Washington Bureau: (202) 371-2121 **