U.S. lawmakers optimistic about tax cut deal

* Negotiators continue talks on tax deal – Kyl

* Taxes to go up in January without congressional action

By Donna Smith

WASHINGTON, Dec 5 (BestGrowthStock) – Senior U.S. lawmakers said on
Sunday they were optimistic about striking a deal to extend
Bush-era tax cuts for all taxpayers and continue emergency
jobless aid for millions of long-term unemployed Americans.

President Barack Obama and other Democratic leaders want to
extend the cuts only for low- and middle-income Americans,
arguing that the tax breaks for the wealthy would add $700
billion to budget deficits over the next 10 years.

Republicans, who made big gains in the Nov. 2 congressional
elections, want rates unchanged for all taxpayers. They say the
uncertainty over taxes discourages investment and hurts job
growth as the economy recovers from the worst recession since
the Great Depression.

“Most folks believe the recipe (of a deal) would include at
least an extension of unemployment benefits for those who are
unemployed and an extension of all of the tax rates for all
Americans for some period of time,” Republican Senator Jon Kyl
said in an interview on CBS’s “Face the Nation” program.

Kyl, who has been involved in negotiations with the White
House, said negotiators were still working on the details of a
package. “At least in theory an agreement could be reached in
the relatively near future,” he said.

Tax rates would increase in January unless Congress takes
action before it adjourns, as expected later this month.

Many Democrats would like to settle the tax issue before
the new Congress is seated in January, when Republicans will
take control of the U.S. House of Representatives.

Dick Durbin, a top Senate Democrat, said on the same
program that any deal that did not include an extension of aid
for millions of unemployed whose benefits have been exhausted
was a “non-starter.”

Extended jobless aid began to expire this week when
Congress did not agree on an extension.

“The notion that we would give tax cuts to those making
over a million dollars a year, which is the Republican
position, and then turn our backs on 2 million Americans who
will lose unemployment benefits before Christmas … is
unconscionable,” Durbin said.

Democratic measures to extend tax cuts for all but the
wealthiest fell short of the 60 votes needed to pass
legislation in the 100-member Senate on Saturday, as had been
expected.

Republicans, the minority party in the Senate, had
dismissed the move as a political stunt. They argue that
raising taxes for the rich would be a mistake that would cost
jobs because the wealthy can create jobs.

Senate Republican leader Mitch McConnell said the Senate
vote on Saturday meant that all taxpayers would continue to
enjoy the benefits of Bush-era tax cuts.

“I think it’s pretty clear now that taxes are not going up
on anybody in the middle of this recession,” McConnell said in
an interview on NBC’s “Meet the Press” program. “We’re
discussing how long we should maintain current tax rates.”
(Reporting by Donna Smith; Editing Paul Simao)

U.S. lawmakers optimistic about tax cut deal