- The Washington Times - Sunday, November 14, 2010

The White House and Republicans in Congress edged ever closer to a deal Sunday on at least a temporary extension of all of the George W. Bush-era tax breaks that are due to expire at the end of the year.

White House senior political adviser David Axelrod and Sen. Jim DeMint, the South Carolina Republican who has emerged as a major power broker for the chamber’s ascendant conservative bloc, signaled in appearances on Sunday talk shows a willingness to cut a deal in the lame-duck session of Congress that convenes Monday.

The two sides, however, remain well short of an agreement.

With taxpayers facing major increases in their tax bills after Jan. 1, congressional Republicans have pressed for a permanent extension of all the tax cuts. Mr. Obama and congressional Democrats, citing what they say is the negative effects the cuts will have on deficits, want to preserve “middle-class” tax breaks while ending them for wealthier Americans.

Mr. DeMint, speaking on “Fox News Sunday,” said he could consider what is emerging as the leading compromise position: a full extension of the middle-class tax cuts and a “temporary” extension of the higher-end breaks as well.

“I hope we can get a permanent extension,” he said. “But … if that’s all we can get out of the president … we’ll work with him on that.”

Mr. Axelrod, who angered Democrats last week by suggesting Mr. Obama may have to back down on the issue, considering the major GOP gains in the midterm elections, talked tough Sunday, but left clear negotiating space for a short-term extension of all the Bush tax cuts.

“The bottom line is that [President Obama] wants to sit down and talk about this,” Mr. Axelrod said on NBC’s “Meet the Press.”

“There’s no bend on permanent extension of tax cuts for the wealthiest Americans,” he added, leaving room for a temporary extension.

The administration official added the White House hoped to have the tax-cut impasse resolved in the next few weeks, in part because of the uncertainty that would come if the cuts expire and in part because of the Democrats’ weaker bargaining position in the next Congress.

Mr. Obama himself told reporters on Air Force One on his way back from a 10-day Asia trip that he thought a deal could be reached that includes “making sure that taxes don’t go up for middle-class families starting January 1.”

But he also indicated he may position himself as deficit hawk in the talks, saying he wanted to hear how Republicans “intend to pay for” an extension on all tax cuts, “particularly given that they’re also saying they want to control the deficit and debt.”

Sen.-elect Rand Paul, Kentucky Republican and a likely ally of Mr. DeMint in the next Congress, said Sunday he would stand firm for a permanent extension of all the tax cuts when he takes his seat in January.

“Really, the compromise is where you find the reductions in spending,” Mr. Paul said on CBS’ “Face the Nation.” “I don’t think the compromise is in raising taxes.”

The tax-cut question dominated the Sunday talk shows and is likely to dominate the lame-duck session of Congress, which will include a large contingent of Democratic lawmakers who were defeated in their re-election bids. Lawmakers return to town Monday to debate the expiring tax cuts and deal with a Dec. 3 deadline to pass a new series of spending bills to keep the government functioning.

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