Lawmakers Dig in as Taxes Negotiations Begin

After emerging from a bipartisan meeting Tuesday between leaders of both political parties and President Barack Obama pledging cooperation in negotiating the extension of expiring Bush-era tax cuts, both sides immediately dug in their heels.

Republicans have made clear their insistence on extending the tax cuts to every American, regardless of income. Democrats say that is fiscally irresponsible.

"We ought to make permanent those tax cuts for the middle class," said White House Press Secretary Robert Gibbs on CBS' "The Early Show" Wednesday morning, adding that Mr. Obama has "drawn the line (where) we shouldn't make tax cuts for millionaires and billionaires."

Mr. Obama and Democratic leaders in Congress want to extend tax cuts for individuals making less than $200,000 and married couples making less than $250,000. Republicans and some rank-and-file Democrats want to extend the tax cuts for everyone.

Gibbs said Budget Director Jack Lew was going to Capitol Hill Wednesday, saying that Mr. Obama "believes we can find common ground." Gibbs said both sides on this dispute have a responsibility "to figure this out by the end of the year."

But more signs that a genuine attempt for bipartisanship remains largely rhetorical emerged Tuesday, as Senate Republicans quietly began gathering signatures on a pledge to block any legislation this year not dealing with tax cuts or federal spending.

Aside from action on the Bush-era tax cuts, several other important pieces of legislation await Congressional action, including the ratification of the nuclear arms pact between the U.S. and Russia.

Obama, Republicans Don't Find Much Common Ground
Senate GOP Pledge to Block Dems' Legislation
Obama, Republicans Agree to Negotiate on Tax Cuts

Even as the two sides talk, House leaders are planning to hold a politically charged vote Thursday to extend middle-class tax cuts while letting taxes for the wealthy expire, the Associated Press reports.

The bill, if it passes the House, stands no chance in the Senate. Nevertheless, Senate Majority Leader Harry Reid, D-Nev., said he is considering holding a similar vote.

"House Democrats have long supported extending the tax cuts for America's middle class," House Speaker Nancy Pelosi said. "Democrats continue to have concerns about the impact on the deficit of giving a tax cut to the nation's wealthiest 2 percent."

The two sides agreed after Wednesday's meeting to appoint a bipartisan working group to discuss the tax cuts, the AP reports. The four lawmakers and two administration members won't have much time to come up with a deal to prevent sweeping tax increases that would hit taxpayers at every income level.

Mr. Obama signaled he was ready to compromise after elections in which Republicans won control of the House and gained seats in the Senate. But the president has yet to make a detailed proposal.

Republicans, meanwhile, have little incentive to make major concessions in December, considering their power on Capitol Hill will greatly increase in January. Democrats still control both chambers until the end of the year, but they need Republican votes in the Senate to pass a tax bill.

"If President Obama and Democratic leaders come up with a plan in the lame-duck session to cut spending and stop all the tax hikes, they can expect a positive response from Republicans," said House Republican leader John Boehner of Ohio, who is in line to become the new speaker in January. "If the lame-duck Congress is unable or unwilling to act, the new House majority will in January."

The president appointed Treasury Secretary Timothy Geithner and Budget Director Jacob Lew to the tax negotiating group. Rep. Dave Camp of Michigan, the top Republican on the House Ways and Means Committee, will represent House Republicans and Rep. Chris Van Hollen of Maryland will represent House Democrats. Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, will represent Senate Democrats; Sen. Jon Kyl of Arizona, the second ranking GOP leader in the Senate, will represent Senate Republicans.