Top Democrat signals deal on tax cuts

By Richard Cowan and Kim Dixon, Reuters

WASHINGTON — The top Democrat in the U.S. Senate said on Tuesday he was willing to consider a temporary tax cut extension for all income levels, a step that could pave the way for a possible deal with Republicans on Bush-era tax cuts. “This is something we will take a look at,” Senate Majority Leader Harry Reid told reporters, referring to a plan to extend all the cuts for two or three years. Many leading Democrats like Reid previously opposed continuing tax cuts for the wealthiest, while they want a permanent extension of existing tax cuts for those individuals making US$200,000 or less annually. Reid and his fellow Democrats will hold a second day of closed meetings on Wednesday to talk about upcoming legislation. While agreeing to look at extending all current tax cuts, Reid said he personally opposed the idea. “For people to say that these upper-income tax cuts affect most small business is simply not true. My main concern is to prevent a tax hike on the middle class,” he said. Democrats are politically weakened following the Republican takeover of the House of Representatives and their big gains in the Senate in the Nov. 2 congressional elections.

Powerful Democrats are still pushing to give added tax protection to the middle class. Senate Finance Committee Chairman Max Baucus said it was “my intent, my hope, my desire” to put forward a permanent extension of middle class tax cuts this year. U.S. President Barack Obama will meet Republican and Democratic leaders on Nov. 30, the White House said. He had asked to meet them on Thursday to discuss the tax cuts, but the meeting was shifted at the request of Republican leaders who said there was a scheduling clash. Legislation is not expected to come up for a vote until after next week’s Thanksgiving break at the earliest. A deal on a temporary extension of the Bush-era tax rates could also be linked to renewal of unemployment benefits for 2 million Americans about to lose them, a senior Republican in the House of Representatives said. Representative Pete Sessions, a Republican in leadership, said he could back extending jobless benefits, favored by Democrats like House Speaker Nancy Pelosi, in exchange for an extension of all Bush-era tax cuts, including for the wealthiest groups. “What we’re going to do is sit down and talk with Mrs. Pelosi,” Sessions told Reuters as he left a meeting of House Republicans. “I see nothing wrong with her winning as long as the American people do.”