Tags: US | Tax | Cuts

McConnell: Talks Center on Length of Tax Cuts

Wednesday, 01 Dec 2010 09:06 PM

 

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WASHINGTON (AP) — Senate Republican leader Mitch McConnell predicts the Senate will vote to extend Bush era tax rates to all taxpayers, saying the only issue under negotiation with Democrats and the White House is for how long.

A temporary extension of one to three years would represent a compromise between Republicans and President Barack Obama. Republicans have called for a permanent extension of 2001 and 2003 tax cuts. Obama has said he only wanted to extend the cuts to individuals making less than $200,000.

But the White House had signaled it could be amenable to a temporary extension while stressing its opposition to a permanent extension of the tax rate for wealthier taxpayers.

Democrats also want to extend unemployment benefits as part of the tax agreement.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) — The White House held the door open Wednesday for a year-end compromise that would extend all of the Bush-era tax cuts temporarily as House Democrats scheduled a politically charged vote to let them expire for the wealthy on Jan. 1.

White House spokesman Robert Gibbs reiterated that President Barack Obama's main goal is to prevent a middle class tax increase. Obama's "other line in the sand" is that he won't support a permanent extension of tax cuts for the wealthy, Gibbs said on ABC's "Good Morning America."

Obama, meeting Tuesday with the top two Republicans and the top two Democrats in the House and Senate, specifically voiced his objection to a permanent extension "to the wealthiest Americans.

"Having said that, we agreed that there must be some sensible common ground," Obama said.

That leaves open the possibility of a temporary extension of all the tax cuts.

Later, Gibbs declined to say whether Obama would support extending all the tax cuts for up to three years, which would push the issue beyond the next presidential election, in 2012.

Sen. Bob Corker, R-Tenn., said, "At the end of the day, I've been saying for six months, we'll end up with a minimum of two years of tax policy."

Treasury Secretary Timothy Geithner and White House Budget Director Jacob Lew met Wednesday with a group of four lawmakers from both parties to negotiate a deal on tax cuts. After two hours, they emerged from a closed-door meeting to say only that they would meet again later in the day.

"No surprises," Geithner said after the morning meeting. "We went through everything on the table, and we agreed we were going to come back this afternoon, late in the day and continue the conversations."

Obama and Democratic leaders in Congress want to extend tax cuts for individuals making less than $200,000 and married couples making less than $250,000. Republicans and some rank-and-file Democrats want to extend the tax cuts for everyone.

Making tax cuts permanent for middle- and lower-income taxpayers would add a little more than $3 trillion to the national debt over the next decade. Making them permanent for high earners would require an additional $700 billion in federal borrowing, according to congressional estimates.

The House vote, scheduled for Thursday, would extend middle-class tax cuts while letting tax cuts for high earners expire. Even if it passes the House, the bill stands no chance in the Senate. Nevertheless, House Democrats want to publicly stake out their position before compromising on extending the tax cuts for everyone.

Some Senate Democrats are pushing for a similar vote.

House Majority Leader Steny Hoyer, D-Md., said the House vote wouldn't undermine bipartisan negotiations on the tax cuts, "nor is it intended to embarrass or to put Republicans in a difficult place."

House Republican Leader John Boehner of Ohio called the vote, "a Washington stalling tactic with job-killing implications for employers and entrepreneurs gripped by uncertainty over the looming tax hikes."

Obama said Wednesday he is confident Democrats and Republicans will be able to resolve their differences over tax cuts, though he said there would be some "lingering politics" that have to be dealt with.

Forty-two Senate Republicans signed a letter to Senate Majority Leader Harry Reid, D-Nev., saying they intend to block action on all Democratic-backed legislation until the Senate votes on extending the Bush tax cuts, as well as a budget bill needed to keep funding the government into next year.

The strategy would further doom already dismal prospects for Democratic attempts to end the Pentagon's practice of discharging openly gay members of the military service and give legal status to young illegal immigrants who join the military or attend college.

Republicans have little incentive to make major concessions in December, considering their power on Capitol Hill will greatly increase in January. Democrats still control both chambers until the end of the year, but they need Republican votes in the Senate to pass a tax bill.

"Congress should vote immediately to cut spending and stop all the tax hikes," Boehner said. "If the lame-duck Congress is unwilling to cut spending and permanently stop all the tax hikes, the new House majority will act in January."

___

Associated Press writers Julie Hirschfeld Davis, Jim Kuhnhenn and Julie Pace contributed to this report.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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