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US Senators Say Temporary Tax Cut Extension Likely

  • Michael Bowman

Senator Jon Kyl

Senator Jon Kyl

U.S. senators of both parties say a compromise on federal taxes is likely to preserve lower rates for all income levels and allow for consideration of other measures, such as extending federal benefits for the unemployed. The comments come one day after Senate Republicans successfully blocked consideration of two Democratic proposals that would have allowed tax cuts to continue for all but the wealthiest Americans.

The tax debate comes at a time of sluggish U.S. economic growth and large federal budget deficits. At issue: should broad tax cuts enacted during the Bush administration continue for all income levels, or only for the middle class?

Republican Senator John Kyl of Arizona opposes any tax hikes. "Especially in an economic downturn, like we are in now, it is not a good idea to raise people's taxes. They key here is to put people back to work, to get economic growth going again. We are never going to get out of the deficit we have, unless we have economic growth," he said.

Kyl spoke on the CBS program Face The Nation.

Also appearing on the program was Democratic Senator Richard Durbin of Illinois, who accused Republicans of preventing congressional action on extending jobless benefits while demanding tax breaks for millionaires.

"The notion that we would give tax cuts to those making over $1 million a year, which is the Republican position, and then turn our backs on two-million Americans who will lose unemployment benefits before Christmas, is unconscionable," he said.

Republicans have pledged to use procedural motions to block Senate consideration of all legislation so long as the tax issue remains unresolved. President Barack Obama has urged members of both parties to negotiate a compromise on taxes and other matters. Without action, all Bush-era tax cuts on all income levels will expire at the end of the year.

Appearing on NBC's Meet The Press program, the Senate's top Republican, Mitch McConnell, sounded optimistic that a bipartisan deal will be struck. "I think the American people expect us to work together to make sure their taxes do not go up. And we are working on that package, and I think we are going to get there," he said.

McConnell would not discuss details of a possible compromise, but negotiations are widely reported to be focusing on preserving all tax cuts for another year or two and an extension of unemployment benefits.

Senator Durbin says he will oppose any deal that falls short of that basic framework. "I am not voting for any permanent tax cut for people at the highest income categories," he said.

Budget experts say, in the long run, significant sacrifice from all Americans will be required to eliminate the nation's trillion-dollar federal deficit. Most economists believe some combination of spending cuts and tax increases is needed.

A presidential deficit commission has issued recommendations that would put the deficit on a downward trajectory during the coming decade, but many of the provisions are thought to be politically unpalatable.