Barack Obama and Repub­li­cans agree to ne­go­ti­ate on taxes

The Pak Banker - - International3 -

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

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