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Obama, Hill Leaders Disagree in First Post-Election Bipartisan Meeting

By Cheryl Bolen, Brett Ferguson, Heather M. Rothman and Christine Grimaldi
Publication Date: 12/01/2010

President Obama Nov. 30 met with the party leaders of the House and Senate to begin forming a legislative agenda for the lame-duck session, but meeting participants agreed only to form a working group to come up with a compromise on extending tax cuts.

Later in the day, Democratic leaders in the House announced they were hoping to move legislation as early as Dec. 2 that would make permanent the Bush-era tax cuts for families earning less than $250,000.

Following the meeting, Obama called it a good start and that the American people would hold both parties accountable, but that there would have to be additional meetings soon, potentially at Camp David.

The president said the American people want lawmakers to focus on long-term deficits as well as safety and security.

First, however, meeting participants will work to make sure that taxes do not go up on middle-class families on Jan. 1, 2011, the president said.

“There was broad agreement that we need to work to get that resolved before the end of the year,” Obama said. “Now, there's still differences about how to get there.”

Republican leaders want to permanently extend tax cuts not just to middle-class families but to some of the wealthiest Americans at the same time, Obama said. “And here we disagree,” he said.

Obama said he and Democratic leaders believe that this would add an additional $700 billion to the national debt over the next 10 years. The president said he continues to believe this would be “unwise and unfair,” particularly at a time when lawmaker are contemplating deep budget cuts that require broad sacrifice.

Finding Common Ground

But the group agreed that there must be some sensible common ground, the president said. Obama said he had appointed Treasury Secretary Timothy Geithner and Office of Management and Budget Director Jack Lew to work with representatives of both parties to break through the logjam.

The four congressional representatives will be Senate Finance Committee Chairman Max Baucus (D-Mont.), Senate Minority Whip Jon Kyl (R-Ariz.), House Ways and Means Committee ranking member Dave Camp (R-Mich.), and Rep. Chris Van Hollen (D-Md.).

That process will begin right away and the president said he expects to get some answers back in the “next couple of days” about accomplishing their key goal of growing the economy and putting people back to work.

The president said he also urged both parties to move quickly to preserve a number of other tax breaks for individuals and businesses that are set to expire at the end of the year.

Among them are tax breaks for college tuition and for businesses that hire unemployed workers, Obama said. In addition, the group spoke about the bipartisan deficit reduction commission and the difficult choices that will be required to get the nation's fiscal house in order.

The group also spoke about working together to keep the government running this year in a fiscally responsible way, the president said. And, they discussed an extension of unemployment insurance benefits, which expire for the long-term unemployed today, he said.

Obama Still Hoping for More

The meeting, which initially had been conceived as a working meeting and dinner on Nov. 18, was postponed and reduced in scope to a traditional mid-morning meeting. Still, the meeting lasted about two hours.

The president had wanted the meeting to result in a legislative agenda for the lame-duck session, including a package of tax cuts and an extension of unemployment benefits, a vote on the START nuclear nonproliferation treaty, a vote to repeal the military's ban on gay and lesbian servicemembers, and a vote on a bill to allow immigrants to attend college or serve in the United States military.

But on Nov. 29, White House Press Secretary Robert Gibbs downplayed the potential for the meeting, saying the president hoped to at least get agreement on the need to act on a tax package by the end of the year.

“Again, I think this is the beginning of the conversation,” Gibbs said on Nov. 29. “I do not expect that we'll come out after an hour or an hour and a half and have full agreement on this.”

GOP Not Fully Convinced

Congressional leaders left the White House meeting calling it a “useful” and “frank” discussion, but neither Democrats nor Republicans offered any concessions that can move an extension of the Bush-era tax cuts any closer to passage.

While the House vote will move ahead, Republicans said the legislation will be a nonstarter in the Senate and may not even garner a majority in the House because several moderate Democrats do not want to see taxes rise for anyone.

Timeline Still Unclear

Separately, Baucus told reporters that it is still unclear how many meetings will be held between the congressional representatives and the White House to negotiate the tax cut package, but stressed that the goal remains to try to prevent taxes from rising on middle-class households.

“We're going to try our best,” Baucus said when asked about the possibility of solutions in the coming days. “It's important this be resolved this year.”

Other Taxes on Table

In addition to income tax rates, Kyl said there is broad agreement on the need to fix the estate tax before rates jump back to their pre-2001 level of 55 percent with a $1 million per person exemption level.

The complete text of this article can be found in the BNA Daily Tax Report, December 1, 2010. For comprehensive coverage of taxation, pension, budget, and accounting issues, sign up for a free trial or subscribe to the BNA Daily Tax Report today. Learn more »

© 2010, The Bureau of National Affairs, Inc.