Tax Cuts

The partisan stalemate over tax cuts softened Monday, pointing to the outlines of a potential compromise that could involve extending the cuts for up to two years. Other proposals also were being floated as representatives and senators gathered for a post-election, lame-duck session, including one that would raise the income threshold for the tax cuts to $1 million, which would allow many households in the top bracket to continue receiving a tax break. For months, Republican lawmakers have been bitterly at odds with President Obama over how to extend tax cuts approved early in the George W. Bush administration, with especially sharp disagreement over breaks for higher-income taxpayers.

Congressional Democrats searched for leverage Friday in their bitter debate with Republicans over extending George W. Bush-era tax cuts, lashing out against giving "tax breaks to millionaires" and preparing for a rare weekend session in the Senate on the issue. But the increasingly aggressive Democratic posture may come too late in the protracted battle over the fate of tax cuts that are set to expire Dec. 31. The White House has indicated it would consider an agreement with Republicans to temporarily extend all tax breaks, even for households earning more than $250,000 annually, if the GOP agreed to concessions and withdrew its block on certain Democratic priorities.

George W. Bush, the man behind the tax breaks now sparking debate from President Obama and his likely challenger, Mitt Romney, just wishes that the policies didn't bear his name. “I wish they weren't called the Bush tax cuts,” he said, chuckling, during a speech at the New York Historical Society. “If they were called someone else's tax cuts, they'd be less likely to be raised.” But with Bush's moniker firmly attached, the policies are turning out to be a key election talking point.

The Senate overwhelmingly advanced President Obama's $858-billion tax-cut package Monday in a vote that heightened pressure on reluctant House Democrats and enhanced the likelihood of congressional approval for the compromise. The Senate could send the package to the House by midweek and then turn to remaining legislative priorities, including a nuclear arms reduction treaty with Russia, a repeal of the ban on openly gay military personnel and a youth immigration bill. Still, House Democrats have yet to relent in their opposition to the tax-cut deal between the White House and GOP leaders, and they are expected to demand changes to the bill's estate tax provision, which liberal lawmakers say is skewed to the wealthy.

As the Senate gears up for a key vote on the package to extend tax cuts, polls released Monday showed that the American people, regardless of political party or persuasion, strongly favored the agreement hammered out by the Obama administration and Republicans. According to the latest poll by the Pew Research Center for the People & the Press, 60% of those questioned said they favored the agreement, which has been attacked by House liberals and Senate conservatives. About 22% said they disapproved.

Though many of her fellow liberals oppose the tax-cut deal negotiated between President Obama and congressional Republicans, Sen. Barbara Boxer (D-Calif.) on Tuesday defended her support of the measure. "The fact is, this bill will be a help to the middle class," said Boxer, who, during George W. Bush's presidency, assailed the 2001 and 2003 tax cuts as skewed toward the wealthy. She and fellow California Democratic Sen. Dianne Feinstein backed the $858-billion package now before the Senate, even though it would renew the tax rates to all income levels, including the highest earners.

President Obama's year-end deal-cutting with Republicans, which produced an important compromise on extending George W. Bush-era tax cuts, has come to represent what White House officials see as a successful template for the president's role on other issues heading into a contentious 2011. By emerging as a mediator, Obama showed a way of doing business that many voters were expecting but didn't see during most of his first two years. As a result, White House aides now feel they have "a little wind at our back," a senior White House official said.

WASHINGTON - President Obama is heading back out on the campaign trail this week - this time to pressure Congress to extend the expiring middle-class tax cuts.   On Friday, Obama plans to travel to Hatfield, Pa., for an event at a toy factory that according to the White House “depends on middle-class consumers during the holiday season.”   Lest anyone miss the holiday spin of this public campaign, the White House issued an analysis Monday predicting how the automatic tax increases could hurt the winter shopping season.

Angry House Democrats on Thursday voted to reject the tax-cut extension package negotiated by President Obama with Republicans. In an emotional voice vote in their caucus, Democrats, who have repeatedly attacked the agreement as too generous to the rich, said the package should not come to the floor in its current form. The next step is up to the leadership. “In the caucus Thursday, House Democrats supported a resolution to reject the Senate Republican tax provisions as currently written,” Speaker Nancy Pelosi said in a statement.

(Reuters) - Top Republican and Democratic officials skirmished Sunday over the timing of a vote on extending tax cuts, seeking an edge ahead November congressional elections likely to be dominated by job anxiety. After Democratic leaders in the U.S. House of Representatives left open the possibility a vote will be delayed past Nov. 2 midterm elections, Republicans shot back that doing so would only add to voters' economic uncertainty. “The Congress has an opportunity this week to end some of the uncertainty by allowing the American people to know what the tax rates are going to be at the end of the year,” House Minority leader John Boehner said on “Fox News Sunday.