- Associated Press - Thursday, December 2, 2010

WASHINGTON (AP) — A leading Senate conservative said Thursday he believes President Obama is ready to embrace the notion of keeping Bush-era tax rates in place for everyone at least temporarily, including the wealthy, with no New Year’s increases.

Sen. Jim DeMint, South Carolina Republican, told CBS’ “The Early Show” he wants to “keep tax rates the same.” Mr. DeMint said he believes Mr. Obama “has come around to the idea that taxes can’t be raised in a recession.”

Mr. DeMint favors a permanent extension of the existing rates but said he thinks Mr. Obama will oppose anything beyond a temporary extension for the wealthy. The senator said, “A business is not going to plan to add 50 people if they only know what their taxes are going to be for the next two years.”

Treasury Secretary Timothy F. Geithner and Jacob Lew, director of the White House’s Office of Management and Budget, held two closed-door meetings Wednesday with a group of four lawmakers from both parties to negotiate a deal on tax cuts.

Reps. Chris Van Hollen, Maryland Democrat, and Dave Camp, Michigan Republican — two of the lawmakers involved in the tax negotiations — gave no indication Thursday that they were making any progress on a deal.

“We’ve just begun the discussion,” Mr. Camp said, “but I think it’s so important that we prevent a tax hike so we can get the economy moving again and get job creation going again.”

Mr. Van Hollen, however, argued that it’s more important to pass an extension of unemployment benefits for people whose compensation is about to run out.

“You have to pay for about $13 billion in emergency unemployment compensation for people out of work through no fault of their own,” he said. “But (Republicans) want a permanent extension of tax cuts for the folks at the very top, which adds $700 billion.”

Mr. Van Hollen added, “This is the kind of conversation we’ve been having up here.”

Both men appeared on ABC’s “Good Morning America.”

The White House held open the possibility for a year-end compromise that would extend all cuts — at last temporarily. And Senate Minority Leader Mitch McConnell, Kentucky Republican, said the only question that remained was how long current rates should be allowed to continue before they expire.

Mr. McConnell said all Republicans and some Democrats oppose any plan that would allow tax rates for the wealthy to rise. He predicted the Senate would approve extending the 2001 and 2003 tax cuts for everyone.

Officials said negotiations center on a one- to three-year extension of the current rates.

White House spokesman Robert Gibbs reiterated Wednesday that Mr. Obama’s main goal is to prevent a middle-class tax increase. Mr. Obama’s “other line in the sand” is that he won’t support a permanent extension of tax cuts for the wealthy.

Mr. Obama specifically has voiced his objection to a permanent extension “to the wealthiest Americans.

“Having said that, we agreed that there must be some sensible common ground,” Mr. Obama said.

Sen. Bob Corker, Tennessee Republican, said, “At the end of the day, I’ve been saying for six months, we’ll end up with a minimum of two years of tax policy.”

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