Tax-Cut Negotiators Urge Delay of Vote Pending Bipartisan Talks

The U.S. lawmakers selected to negotiate with the Obama administration on extending all or some of the Bush-era tax cuts said congressional leaders should drop plans to hold votes until the negotiators can meet.

Senator Max Baucus, a Montana Democrat, and Representative David Camp, a Michigan Republican, said holding votes right away on extending lower tax rates for the first $250,000 of income, as President Barack Obama has proposed, would be premature.

Camp, who will be chairman of the House Ways and Means Committee starting in January, and Baucus, chairman of the Senate Finance Committee, were appointed yesterday as congressional delegates to the talks. Obama named Treasury Secretary Timothy Geithner and Office of Management and Budget Director Jack Lew as the administration’s representatives. Arizona Senator Jon Kyl, the chamber’s No. 2 Republican, and Maryland Representative Chris Van Hollen, a member of the House Democratic leadership, complete the group.

The negotiators will hold their first meeting today, the Treasury Department said.

“I think it’s important to have that meeting first to see where we are” before any votes, Baucus said yesterday. Camp agreed, saying “it seems to me we ought to be given a chance” to begin talks on the tax cuts.

Brokering a Deal

Obama appointed Geithner and Lew to broker a deal with lawmakers that seeks to avoid expiration of all of the 2001 and 2003 tax cuts on Dec. 31. Obama and many Democrats want to retain the lower rates for individuals with an annual income of $200,000 or less and married couples earning no more than $250,000 a year. Under the president’s proposal, the lower rates would expire for incomes above those figures.

Republicans support extending the tax cuts permanently for all income levels.

House Speaker Nancy Pelosi, a California Democrat whose party loses control of the chamber next month, previously said that she was planning a vote for this week on Obama’s proposal.

Senate Democrats had been planning a vote on the same legislation by next week, Baucus said earlier this week. Majority Leader Harry Reid, a Nevada Democrat, yesterday would not say whether that vote would be delayed.

Democratic leaders face some pressure from their caucus to hold the vote as a means of testing Republican mettle to oppose legislation that would retain lower rates for middle-income taxpayers.

“I myself, I’m not talking about compromise,” said Senator Jeff Merkley, an Oregon Democrat. “I think we should go to the floor and have the vote on $250,000.”

Seeking a Vote

In the House, Massachusetts Democrat Richard Neal said he also was eager for a vote. Neal is challenging Michigan Representative Sander Levin for the top Democratic spot on the tax-writing Ways and Means Committee.

“I think we’re near the big moment,” Neal said. “I think both sides want to get a vote up on the board.”

Van Hollen said the House may still vote tomorrow before adding that “things can change around here quickly.”

Obama appointed Geithner and Lew yesterday after meeting for almost two hours with Republican and Democratic congressional leaders at the White House. The president said both sides agree that action is needed to extend tax cuts to middle-income families before the end of the year, even as they remain divided on tax rates for the wealthiest Americans.

“There must be some sensible common ground” to resolve differences on taxes, Obama said. He said he appointed Geithner and Lew “to break through this logjam.”

Tax Puzzle

Negotiators must confront six pieces of a tax puzzle to complete their work. Besides the issue of the extension of lower income tax rates, they must decide whether to keep the 15 percent tax rate on most dividends and long-term capital gains or to let them revert to higher levels. They also must resolve a decade-long dispute over the appropriate level of taxation on estates worth $1 million or more.

Soon-to-expire tax incentives for parents, married couples and low-income workers also are in the mix, as is action to roll back a $66 billion increase in the alternative minimum tax in place for this year. Lawmakers are struggling to restore dozens of business-related tax breaks that expired at the end of 2009, including a research credit claimed by more than 6,000 companies.

To contact the reporters on this story: Ryan J. Donmoyer in Washington at

To contact the editor responsible for this story: Mark Silva at

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