Barack Obama and Republicans agree to negotiate on taxes
WASHINGTON: President Barack Obama and Republican leaders sought to break a "logjam" over the fate of Bush-era tax cuts on Tuesday, forming a new panel the White House hopes will reach a compromise within days.
Obama named Treasury Secretary Tim Geithner and budget director Jack Lew to work with congressional Republicans and Democrats on a deal to prevent broad tax increases from hitting middleincome Americans next year.
They will also tackle the issue that most divides the two political parties: what to do about extending tax cuts for the wealthiest Americans.
A White House official said the group will meet on Wednesday morning "to begin to find common ground on taxes and ensure that middleclass families do not see their taxes increase at the end of the year." Beyond Geithner and Lew, the group is made up of Max Baucus, the Senate Finance Committee's Democratic chairman, Senate Republican Whip Jon Kyl, Democratic Representative Chris Van Hollen and Republican Representative Dave Camp, in line to be chairman of the House's tax-writing Ways and Means Committee in the new Congress. Obama and Republicans, at their first White House meeting since the November 2 congressional elections, stuck to their divergent positions but the president said they agreed the tax cut issue must be resolved by the end of this year. "We agreed that there must be some sensible common ground, so I appointed my Treasury Secretary, Tim Geithner, and my budget director, Jack Lew, to work with representatives of both parties to break through this logjam," Obama said. If no agreement is reached, all taxpaying Americans could see higher bills next year, giving Republicans a chance to score politically by making tax cuts their priority when taking control of the House of Representatives in January. Finding common ground before then will be tricky. Van Hollen, set to become the top Democrat on the House Budget Committee, said the chamber could vote on Thursday to extend lower tax rates on income levels up to $200,000 for individuals or $250,000 for couples, allowing rates for the wealthiest 2 percent Americans to rise.
That vote is seen as a gesture to liberal Democrats, who want to go on record opposing an extension for top earners. If the measure passes the House, it will likely die in the Senate, where Democrats would not have the votes to make it law.
Knowing that, the president may have to agree to extend cuts for Americans of all income levels for one to three years-an onerous option to many Democrats but one that may be the most likely outcome if the two sides agree on anything at all. -Reuters