Democrats meet with Obama over tax cuts deal

By Jim Kuhnhenn

Associated Press

Published: Monday, Dec. 6 2010 1:53 p.m. MST

WASHINGTON — President Barack Obama called Democratic leaders to the White House Monday in hopes of advancing a year-end bipartisan compromise to extend expiring tax cuts for all Americans and renew jobless benefits for the long-term unemployed.

Some Democrats have complained that the White House was surrendering too much to the Republicans by agreeing to include the upper income in any tax cut deal.

The White House also sought renewal of several other tax provisions that are expiring. These were initially included in the 2009 economic stimulus bill and include a tax credit for lower- and middle-class wage earners, even if they don't make enough to pay federal income taxes, breaks to offset college tuition and breaks for companies that hire the unemployed.

Obama signaled a looming deal during a speech in North Carolina Monday, saying he would cede ground in his positions to help Republican and Democratic lawmakers work out a deal.

"We've got to make sure we're coming up with a solution, even if it's not 100 percent what I want or 100 percent what the Republicans want," Obama said.

Among those expected in the meeting were Vice President Joe Biden, House Speaker Nancy Pelosi, House Majority Leader Steny Hoyer, Senate Majority Leader Harry Reid and Senate Democratic whip Dick Durbin.

All sides say a deal could be completed this week. An increasing sense of urgency to complete the deal has set in at the White House, which also wants the Senate to ratify a nuclear arms treaty with Russia. But time is running out for lawmakers in Congress' lame-duck session.

The White House meeting with Democrats Monday was designed to identify what provisions would have to be in the tax deal to win Democratic support.

Questions remained about how many concessions Obama could extract from Republicans in exchange for extending current tax rates for high earners, a proposal he opposed. But without action, lawmakers face the prospect of delivering a tax hike to all taxpayers at the end of the year, when the current rates expire and revert to higher pre-2001 and 2003 levels.

Negotiations between the Obama administration and a bipartisan group of lawmakers centered on a two-year extension of current rates.

At the same time, a jump in the unemployment rate to 9.8 percent is putting pressure on Republicans to accede to President Barack Obama's demand that Congress extend unemployment insurance for a year. GOP congressional leaders had opposed an extension of benefits without cuts elsewhere in the federal budget.

"I think most folks believe the recipe would include at least an extension of unemployment benefits for those who are unemployed and an extension of all of the tax rates for all Americans for some period of time," Sen. Jon Kyl of Arizona, the Senate's Republican negotiator in the talks, said Sunday.

Central to the deal, White House officials and Democrats said, is an extension of unemployment benefits.

"Without unemployment benefits being extended, personally, this is a nonstarter," said Sen. Dick Durbin of Illinois, the second-ranking member of the Senate Democratic leadership.

Republicans have insisted that any extension of jobless aid be paid for with cuts elsewhere in the federal budget. The White House opposes that, saying such cuts are economically damaging during a weak recovery.

Sen. Orrin Hatch, R-Utah, said Republicans would probably cede that point to the Democrats.

"Let's take care of the unemployment compensation even if it isn't ... backed up by real finances," Hatch said. "We've got to do it. So let's do it. But that ought to be it."

About 2 million unemployed workers will run out of benefits this month if they are not renewed, and the administration estimates 7 million will be affected if the payments are not extended for a year.

Senate Republican leader Mitch McConnell on Sunday said discussions are still under way on a variety of unresolved issues.

Any deal would require the approval of the House and Senate, and the president's signature. Obama told Democratic congressional leaders Saturday that he would oppose any extension of tax rates that did not include jobless benefits and other assistance his administration was seeking.

The short-term tax and spending debate is unfolding even as Congress and the Obama administration confront growing anxieties over the federal government's growing deficits.

A presidential commission studying the deficit identified austere measures last week to cut $4 trillion from the federal budget over the next decade.

The movement toward a possible compromise came after Republicans blocked Democratic efforts in the Senate Saturday to extend the current tax rates on all but the highest income levels. Republicans prefer extending all the tax rates permanently, but that cannot win legislative approval either. Even if it did, Obama would be sure to veto.

Durbin and Kyl spoke Sunday on CBS' "Face the Nation," while Hatch appeared on CNN's "State of the Union" and McConnell on NBC's "Meet the Press."

Get The Deseret News Everywhere

Subscribe

Mobile

RSS