The House voted 234 to 188 to extend tax cuts on all earnings up to $250,000 and John Boehner calls it ‘chicken crap’. The bill is not expected to survive in the Senate.
Neither party is eager to take the fall for letting everyone’s income taxes go up, which would happen immediately if Congress can’t reach agreement by the end of the year. So the outlines of a potential deal have begun to emerge.
Congressional negotiators are discussing a temporary extension of the tax cuts for both middle-class and high-end taxpayers that could last anywhere from one to three years.
“Beneath the surface, amid the posturing, there’s progress in the six-man panel appointed by President Obama to come up with a tax deal,” says Greg Valliere, chief political strategist for the Potomac Research Group, which also advises institutional investors.
The debate now centers on how long a temporary extension would last, as well as what other measures to include in any compromise.
Valliere, like most analysts, believes that a deal is all but certain. “There are still skeptics,” he says. “But we continue to believe the tax cuts will be extended for everyone for either two or three years.”
