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Lawmakers negotiate tax cuts as House plans vote

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WASHINGTON — Republicans and Democrats worked Wednesday to find an agreement on extending Bush era tax cuts that expire at the end of the year, even as House Democrats planned a politically charged vote on a bill that would let tax cuts for the wealthy expire.

The White House, meanwhile, opened the door to a possible compromise that would extend all the tax cuts temporarily.

White House spokesman Robert Gibbs said Wednesday that President Barack Obama's main goal is to prevent a middle class tax increase. Obama's "other line in the sand" is that he won't support a permanent extension of tax cuts for the wealthy, Gibbs said on ABC's "Good Morning America."

Obama, meeting Tuesday with the top two Republicans and Democrats in the House and Senate, specifically voiced his objection to a permanent extension "to the wealthiest Americans.

"Having said that, we agreed that there must be some sensible common ground," Obama said.

That leaves open the possibility of a temporary extension of all the tax cuts.

Later, Gibbs declined to say whether Obama would support extending all the tax cuts for up to three years, which would push the issue beyond the next presidential election, in 2012.

Treasury Secretary Timothy Geithner and White House Budget Director Jacob Lew met Wednesday with a group of four lawmakers from both parties to negotiate a deal on tax cuts. After two hours, they emerged from a closed-door meeting to say only that they would meet again later in the day.

"No surprises," Geithner said after the morning meeting. "We went through everything on the table, and we agreed we were going to come back this afternoon, late in the day and continue the conversations."

Obama and Democratic leaders in Congress want to extend tax cuts for individuals making less than $200,000 and married couples making less than $250,000. Republicans and some rank-and-file Democrats want to extend the tax cuts for everyone.

Making tax cuts permanent for middle- and lower-income taxpayers would add a little more than $3 trillion to the national debt over the next decade. Making them permanent for high earners would require an additional $700 billion in federal borrowing, according to congressional estimates.

The House vote, scheduled for Thursday, would extend middle-class tax cuts while letting tax cuts for high earners expire. Even if it passes the House, the bill stands no chance in the Senate. Nevertheless, House Democrats want to publicly stake out their position before compromising on extending the tax cuts for everyone.

Some Senate Democrats are pushing for a similar vote.

House Majority Leader Steny Hoyer, D-Md., said the House vote wouldn't undermine bipartisan negotiations on the tax cuts, "nor is it intended to embarrass or to put Republicans in a difficult place."

"It is an effort to show, as we said before the election, that we were going to make sure that the middle-income working men and women of America would not have" a tax increase, Hoyer said.

House Republican Leader John Boehner of Ohio called the vote, "a Washington stalling tactic with job-killing implications for employers and entrepreneurs gripped by uncertainty over the looming tax hikes."

Obama said Wednesday he is confident Democrats and Republicans will be able to resolve their differences over tax cuts, though he said there would be some "lingering politics" that have to be dealt with.

Forty-two Senate Republicans, meanwhile, signed a letter to Senate Majority Leader Harry Reid, D-Nev., saying they intend to block action on all Democratic-backed legislation until the Senate votes on a budget bill to keep funding the government into next year and extending the Bush tax cuts.

The strategy would further doom already dismal prospects for Democratic attempts to end the Pentagon's practice of discharging openly gay members of the military service and give legal status to young illegal immigrants who join the military or attend college.

Republicans have little incentive to make major concessions in December, considering their power on Capitol Hill will greatly increase in January. Democrats still control both chambers until the end of the year, but they need Republican votes in the Senate to pass a tax bill.

"Congress should vote immediately to cut spending and stop all the tax hikes," Boehner said. "If the lame-duck Congress is unwilling to cut spending and permanently stop all the tax hikes, the new House majority will act in January."

Associated Press writers Julie Hirschfeld Davis, Jim Kuhnhenn and Julie Pace contributed to this report.