With a first meeting called for Thursday, House and Senate Democrats are beginning active discussions on when — and for how long — to extend Bush-era middle-class tax cuts due to expire at the end of this year.
The political and economic pressures to act are immense going into November’s elections. But Republicans won’t make the task easy if rates go up for the wealthy, and Democrats are divided, given the radically changed budget picture since the tax cuts were enacted in 2001.
The 10-year cost — $1.6 trillion and climbing — has always made this decision the elephant in the room even after health care reform and the giant economic recovery bill last year. In today’s deficit climate, liberals are worried about sustaining social programs, and, after faulting Republicans for enacting tax cuts on an installment plan, many Democrats are looking for something less than a permanent extension.
“It’s balancing the jobs-growth issue and the debt issue,” House Ways and Means Committee Chairman Sander Levin (D-Mich.) told POLITICO. “The challenge to making them permanent is it’s a trillion-plus, plus. That’s what’s under active consideration: when and for how long.”