House extends middle-class tax cuts

While negotiators for both political parties worked behind the scenes to hammer out a deal on extending the Bush-era tax cuts and, possibly, unemployment insurance, House Democrats pushed through a measure that would extend the tax cuts for individuals making less than $200,000 and married couples making less than $250,000.

Under the House measure, tax cuts for wealthier Americans who make over those limits would expire.

The bill passed by a vote of 234 to 188.

Republicans are dead-set on extending the tax cuts for everyone. The bill passed by the House today will certainly fail in the Senate, where Republicans have enough votes to block it.

I'm trying to catch my breath so I don't refer to this maneuver going on today as chicken crap, said Rep. John Boehner, R-OH, who will become Speaker of the House next year. This is nonsense, all right? The election was one month ago. We are 23 months from the next election, and the political games have already started trying to set up the next election.

The Obama administration's position is mirrored in the House measure - extension of the tax cuts for couples making under $250,000 and expiration of the cuts for the wealthier Americans.

But the President has left the door open for debate and compromise. Therefore, negotiations are ongoing.

Treasury Secretary Timothy Geithner and White House Budget Director Jacob Lew began holding closed-door meetings Wednesday with a group of four lawmakers from each party.

I'm actually optimistic that before the end of the year we are going to have come to some agreements on some critical issues, Obama said today at a White House greeting for newly elected governors.

Obviously issue number one is making sure that on January 1, middle-class families aren't seeing their taxes go up as a consequence of the expiration of some of the Bush tax cuts that are currently in place and some of the tax cuts that we've put in place over the last two years, the President said. And so that's going to be an important discussion over the next several days. I believe it will get resolved.

Obama said he was confident that in the end people are going to recognize that it's important for families who are still struggling to have some relief and it's important for our economy to make sure that money is still out there circulating at a time when we are recovering but we're not recovering as fast as we need to.

Obama added that he was also hopeful that we get the issue of unemployment insurance resolved.

Republican opposition has blocked an extension of unemployment insurance to approximately 800,000 out-of-work individuals, whose benefits ended at midnight Nov. 30. Another 2 million are due to lose UI benefits at the end of December.

Judging by statements made by players from both sides over the last few days, negotiations appear to be centered around extending the Bush-era tax cuts for everyone for one, two or three years, and extending the UI benefits for a year.

In other words, Democrats will allow an extension of tax cuts for the wealthy, if Republicans do not insist that the extension be made permanent, and if the GOP allows an extension to UI benefits.