McConnell Expects Bipartisan Deal on Tax Cut

Democrats have led the charge to extend the tax break, raising pressure on Republicans to join in or face possible voter backlash in next November's congressional elections.

The House of Representatives is set to approve a Republican plan as early as Tuesday to extend the tax cut, tying it to a bid to accelerate approval of TransCanada Corp's Keystone XL pipeline project between the United States and Canada.

Senate Democratic Leader Harry Reid has said the plan would be rejected by his chamber because of the Keystone pipeline provision opposed by President Barack Obama.

Senior congressional aides predict that Reid and the top congressional Republican, House Speaker John Boehner, will soon take the leading in brokering a deal -- just as they did in a budget fight this year to avert a partial government shutdown.

Reid and Boehner would have to bridge major differences, starting with how to cover the projected $110 billion cost to extend the tax cut for one year.

Democrats favor a surtax on the rich, which Republicans denounce as a tax hike "on job creators." Republican propose instead extending a pay freeze on federal workers.

Assistant Senate Democratic Leader Dick Durbin, appearing on NBC's "Meet the Press," declined to offer any predictions on whether the tax cut would be extended.

But Durbin said, "It is the highest priority of the president and Democrats in Congress."

"This is a make-or-break moment for the middle class," said Durbin.