 Differences remained over details, and some Democrats continued to
object to any plan that would continue Bush-era tax rates at the
highest income levels.Without action, however, Congress faced the
prospect of letting the tax rates revert to higher pre-2001 and 2003
levels and delivering a tax hike to all taxpayers. Negotiations
between the Obama administration and a bipartisan group of lawmakers
centered on a two-year extension of current rates.
At the same time, Friday's jump in the unemployment rate to 9.8
percent added pressure on Republicans to accede to President Barack
Obama's demand that Congress extend unemployment insurance for a
year. A deal could be reached this week.
"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," said Sen. Jon Kyl of Arizona, the Senate's
Republican negotiator in tax talks between lawmakers and the Obama
administration.
"Without unemployment benefits being extended, personally, this
is a non-starter," 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. Senate Republican leader Mitch McConnell on Sunday
said that "all of those discussions are still under way."
But Sen. Orrin Hatch, R-Utah, said Republicans would likely 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 they are not extended for a year.
The White House, however, also wants to include renewal of
several other tax provisions that are expiring. They include a tax
credit for lower and middle-class wage earners, even if they don't
make enough to pay the government, and breaks to offset college
tuition and breaks for companies that hire the unemployed.
Any deal would require the approval of the House and Senate along
with 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.
[to top of second column]
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The short-term 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. Eleven of the 18 commission members backed the
package but voiced misgivings about specific measures, underscoring
the political difficulties of tackling the nation's fiscal problems.
Some economists suggest that short-term deficit spending is
appropriate to boost the economy as long as lawmakers plan to
address increasing deficits in the immediate years ahead. Mark Zandi,
an economist who has advised Democrats and Republicans, said the
cost of unemployment insurance in 2011, for instance, could be paid
for over the following three years.
"You're then providing the stimulus in 2011 and you don't have
the downside on the deficit in the long run, which is what matters
for economic growth," Zandi, chief economist at Moody's Analytics,
said in an interview.
The movement toward a possible compromise came after Republicans
blocked Democratic efforts in the Senate on Saturday to extend the
current tax rates on all but the highest income levels. Republicans
prefer extending all the tax rates permanently, a prospect that also
can't win legislative approval and that Obama would be sure to veto.
As part of a compromise, the Obama administration prefers a
two-year extension of the tax rates. Officials say a one-year
extension would place Congress and the president in the midst of a
similar debate in a mere six months. A three-year extension,
officials say, would cost too much and lose support from liberals.
For Obama, any deal would mean relinquishing, at least for now,
his long-held view that only middle-class voters should continue to
benefit from Bush-era tax cuts. And Democrats, while resigned to a
deal, were not eager to embrace one.
"We're moving in that direction," Durbin said of a compromise to
extend the tax rates. "And we're only moving there against my
judgment and my own particular view of things."
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."
[Associated Press;
By JIM KUHNHENN]
Copyright 2010 The Associated Press. All rights reserved. This
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redistributed. |
