–President Obama Signals Flexibility And A Desire To Do A Tax-Cut Deal
–Obama Sees ‘Basis For A Conversation’ On Tax Cuts
–Congressional Republicans Give Conflicting Signals About Tax-Cut Deal
–Both Parties Dismiss Pleas of Deficit Hawks On Tax-Cut Costs

By John Shaw

WASHINGTON (MNI) – Capitol Hill and all of Washington are alive
with the sound of ideas about extending the Bush era tax cuts.

The Bush tax cuts of 2001 and 2003 are set to expire at the end of
this year.

President Obama has been sending multiple signals since last
Tuesday that he is willing to back down from his long-held position that
the Bush tax cuts be extended only for those individuals making
$200,000 or less and couples making $250,000 or less.

Appearing on CBS’s “60 Minutes” Sunday, Obama made it clear that
wants to reach an agreement with Congress on tax cuts this year.

“My number one priority coming into this is making sure that
middle-class families don’t see their taxes go up January 1st,” he said.

Obama went out of his way not dismiss an idea floated by the
incoming House Speaker John Boehner that all the Bush era tax cuts be
extended for two years and that discretionary spending be cut back to
2008 levels.

“I think that when we start getting specific like that, there’s a
basis for a conversation,” Obama said.

He later added: “We can look at what the budget projections are. We
can think about what the economy needs right now, given that it’s still
weak. And hopefully we can agree on a set of facts that leads to a
compromise.”

Some congressional Democrats have floated another idea: extending
the so-called middle class tax cuts permanently, but extending those for
upper income earners only for a year or two.

Rep. Eric Cantor, the incoming House Majority Leader, said Sunday
on Fox News Sunday that he opposes “decoupling the rates.”

“I am not for sending any signal to small businesses in this
country that they’re going to have their tax rates go up,” Cantor said.

Republican Sen. Orrin Hatch, who is set to become the ranking
Republican on the Senate Finance Committee, has said that he will press
for at least a three-year extension of all tax cuts and preferably a
five-year extension.

Congress returns next week for the first part of its Lame Duck
session. The House and Senate will be in session for a week and then out
the week of Thanksgiving. Congress is expected to return for several
weeks in December.

Democrats will retain their large majorities in the House and
Senate throughout the Lame Duck session, but the political momentum has
clearly shifted to the GOP.

In the various proposals and counterproposals on tax cuts since
election day last week, one idea has apparently dropped out of sight:
the suggestion by former Federal Reserve Board Chairman Alan Greenspan
to let all the Bush era tax cuts expire as lawmakers and the
administration focus on cutting the federal budget deficit.

Renewing all Bush era tax cuts for a decade would cost about $4
trillion — far more than any spending cut proposal discussed by either
party.

** Market News International Washington Bureau: 202-371-2121 **

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