Tax cut deal expected this week

wrahn Contributor
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Senate lawmakers expect a bipartisan group of negotiators to announce a deal in the coming days that would extend the Bush tax cuts for two years and federal unemployment benefits for up to a year.

One sign that a deal will emerge soon: Senate Majority Leader Harry Reid (D-Nev.) said he expects Congress to adjourn a week before Christmas.

President Obama is eager for the Senate to ratify the New START nuclear arms treaty before the holiday, adding incentive for negotiators to forge an agreement this week.

Two outstanding issues in the talks are whether to extend the Make Work Pay and the college-tuition tax credits that were part of the 2009 economic stimulus package, according to congressional sources. Democrats favor the tax breaks but Republicans have balked at their cost.

Those two items would cost an estimated $62 billion and $8 billion, respectively, to extend for one year, according to GOP sources.

Negotiations between the administration and congressional leaders slowed in anticipation of weekend votes on two Democratic tax plans. Rep. Dave Camp (R-Mich.), who is representing House Republicans in the talks, was spotted on a flight to Detroit Friday morning.

On Saturday, the Senate blocked, by a vote of 53-36, a proposal sponsored by Senate Finance Committee Chairman Max Baucus (D-Mont.) to extend current tax rates for families earning up to $250,000 a year. The chamber also declined to consider a plan offered by Sen. Chuck Schumer (D-N.Y.) to extend tax cuts for families earning up to $1 million, voting 53-37.

Those votes clear the way for consideration of an expected deal under negotiation by Treasury Secretary Tim Geithner, White House budget director Jack Lew, Sen. Jon Kyl (R-Ariz.), Baucus, Camp and Rep. Chris Van Hollen (D-Md.).

Full story: Lawmakers, White House expected to forge tax deal this week – TheHill.com