I know that what ever is decided it has to be weighted at both ends. Obama does not want the middle class (main street) to have to pay higher taxes right now, so is the rich get a short wind fall we will have to chuck it up to a win on both sides. It is the idea of adding to the debt because of the Republicans.
By CQ Staff
Key tax writers and congressional leaders are keeping their powder dry as the White House sends signals that it is open to a full extension of the soon-to-expire 2001 and 2003 tax cuts.
Following the Republican victory in the House and gains in the Senate on Tuesday, President Obama said that it was imperative for Congress to resolve the tax issue in the post-election lame-duck session and that his primary goal is making sure the tax cuts for middle-income families do not expire, as scheduled, on Dec. 31.
Unlike his previous statements on the issue, he did not express opposition to also extending the upper-income tax rates, as Republicans want — a shift that appears to reflect the balance of power set to take hold in January and growing GOP leverage.
On Thursday, White House Press Secretary Robert Gibbs told reporters that Obama is open to extending the upper-income rates if that is the only way to ensure that the tax rate for families making less than $250,000 do not expire.
Republicans and some Democrats have discussed a one- or two-year extension of all the tax cuts as a favored option.
Rep. Dave Camp of Michigan, the top Republican on the Ways and Means Committee, who is slated to become chairman in January, was cautious in a statement Thursday.
“I take any signal that the President may be backing off his pledge to raise taxes on small businesses as a good sign, but we have to see where this discussion goes,” Camp said in a statement. “The uncertainty about how high taxes will go next year is already costing us jobs, and it was a mistake for Congress not to have already addressed the 2001 and 2003 rates as well as AMT [alternative minimum tax], the extenders and a host of other tax provisions. The best thing we could do for families and job creation is to extend the current rates as soon as possible for as long as possible.”
A key question, however, is whether House Speaker Nancy Pelosi, D-Calif., and other liberals who oppose extending the top rates will agree to advance legislation that extends all of the tax cuts in order to spare Obama the political pain of a broad tax increase on Jan. 1.
There are plenty of House Democratic moderates who would support a temporary extension of all the tax cuts — and many of them lost their re-election bids Tuesday night.
In a statement Thursday, Ways and Means Chairman Sander M. Levin, D-Mich., said Congress must address middle-class tax cuts, but left the question of the upper-rate cuts unanswered.
“The most important issues facing the American people and the U.S. Congress are the urgent need to create jobs and economic growth, maintain tax cuts for hardworking middle-class families, and extend unemployment benefits for the millions of Americans continuing to look for work,” Levin said. “We as a Congress must come together to ensure these families and the small businesses which fuel our economy have the resources they need to help our economy recover.”
Senate Democrats have been planning to take the lead on dealing with the tax cut extension, but caucus members remain divided on whether to extend all the tax cuts or just the middle-income cuts, and over how to deal with issues like the taxation of dividends and capital gains.
Jim Manley, a spokesman for Senate Majority Leader Harry Reid, D-Nev., said Thursday that Reid “hasn’t made any decisions yet on next steps. He needs to talk to his caucus and the White House, along with Senate Republicans, about next steps.”
While Democrats will retain control of the Senate in 2011, Reid’s majority will shrink from 59 to no more than 53 seats, depending on whether Patty Murray, D-Wash., wins her re-election bid, which is still too close to call.
-- Joseph J. Schatz, CQ Staff
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