Negotiators work on tax deal as House holds vote

Negotiators work on tax deal as House holds vote
News

POSTED: Thursday, December 2, 2010 - 2:34pm

UPDATED: Thursday, December 2, 2010 - 2:39pm

By STEPHEN OHLEMACHER
Associated Press
 

WASHINGTON (AP) -- Negotiators worked on a deal Thursday that would extend expiring tax cuts for everyone even as House Democrats moved toward a vote to show their commitment to letting taxes on the wealthy go up.

The House bill is a political maneuver to satisfy Democratic supporters who oppose extending tax cuts for the wealthy. The bill narrowly survived a procedural vote Thursday morning, 213-203, with 33 Democrats joining all GOP lawmakers in voting against it. Even if the bill passes the House, it has no chance in the Senate, where Democrats need Republican support to pass a tax bill.

House Republican Leader John Boehner of Ohio used barnyard language to describe the House vote to reporters during a news conference.

"I'm trying to catch my breath so I don't refer to this maneuver going on today as chicken crap, all right? said Boehner, who is in line to become House speaker in January. "But this is nonsense, all right? The election was one month ago. We are 23 months from the next election, and the political games have already started trying to set up the next election."

Sweeping income tax cuts enacted under former President George W. Bush are set to expire at the end of the year. If Congress does not act, taxpayers at every income level would be hit with a significant tax increase.

President Barack Obama and Democratic leaders in Congress want to extend the tax cuts only for individuals making less than $200,000 and married couples making less than $250,000. The bill being voted on in the House would do that.

Republicans and some rank-and-file Democrats want to extend the tax cuts for everyone, and the White House has left open the door for a compromise that would extend all the tax cuts for up to three years, including those for the wealthy.

Senate Republican leader Mitch McConnell of Kentucky has indicated he is open to a temporary extension of all the tax cuts, opening the way for a compromise.

Obama said Thursday he's optimistic Democrats and Republicans can reach agreements on critical issues in the coming weeks, including what to do about tax cuts set to expire at the end of the year.

Speaking to more than 20 newly elected governors, Obama said making sure tax cuts don't increase for the middle class is his top priority, though he offered no guidance for how congressional negotiators from both parties should keep that from happening.

"I believe it will get resolved," Obama said. "That doesn't mean there might not be some posturing over the next several days. But I'm confident in the end people are going to recognize that it's important for families who are still struggling to have some relief and it's important for our economy to make sure that money is still out there circulating."

Republican Sen. Jim DeMint of South Carolina said Thursday he believes Obama is ready to embrace the notion of keeping Bush-era tax rates in place for everyone, at least temporarily.

DeMint told CBS's "The Early Show" that he believes Obama "has come around to the idea that taxes can't be raised in a recession."

Treasury Secretary Timothy Geithner and White House Budget Director Jacob Lew began holding closed-door meetings Wednesday with a group of four lawmakers from both parties to negotiate a deal on tax cuts. Those talks continue Thursday, even as the House votes on the Democratic plan.

Reps. Chris Van Hollen, D-Md., and Dave Camp, R-Mich., two of the lawmakers involved in the tax negotiations, gave no indication Thursday that they were making any progress on a deal.

"We've just begun the discussion," said Camp. "But I think it's so important that we prevent a tax hike, so we can get the economy moving again and get job creation going again."

Van Hollen argued it's also important to pass an extension of unemployment benefits for people who are about to run out.

"You have to pay for about $13 billion in emergency unemployment compensation for people out of work through no fault of their own," he said. "But (Republicans) want a permanent extension of tax cuts for the folks at the very top, which adds $700 billion."

Van Hollen added, "This is the kind of conversation we've been having up here."

Both men appeared on ABC's "Good Morning America."

The White House is stepping up its push for Congress to extend unemployment insurance for out-of-work Americans, linking the benefits to an extension of expiring Bush-era tax cuts.

Obama's Council of Economic Advisers on Thursday reported that if Congress does not extend the benefits, 2 million unemployed workers will lose coverage this month and 7 million would lose coverage by November 2011.

Democrats said the House vote wouldn't undermine bipartisan negotiations on the tax cuts.

"We are putting this bill on the floor today because we believe it is important to extend tax cuts for the middle class," said Rep. Chellie Pingree, D-Maine. She said tax cuts for the wealthy have done nothing to stimulate the economy.

"It's time that we let those end," Pingree said.

Camp said the House vote was futile.

"It would be comical if it weren't so irresponsible," Camp said. "Their position is so precarious they won't even allow Republicans to offer amendments or any alternative. Why? Because Democrats know the Republican bill to extend the current tax rates for all taxpayers would pass with broad bipartisan support."


 

Comments News Comments

Post new Comment