The Economy: Possible tax deal would give wins to both parties
WASHINGTON >> White House and congressional negotiators searched for compromise Thursday on huge tax and spending bills with a combined price tag of well over $1 trillion, with leaders hoping to clinch agreements and let Congress adjourn next week for the year.
"Not everybody gets what they want when you negotiate in divided government," House Speaker Paul Ryan, R-Wis., told journalists, a nod toward the tough bargaining so far between President Barack Obama and the GOP-controlled Congress. "But I think we will complete this."
On the spending side, lawmakers were seeking a deal on a $1.1 trillion measure financing federal agencies in 2016. To give negotiators time, the Senate approved a short-term spending bill that lasts until Wednesday; the House was expected to pass it on Friday.
Agreement was close on the numbers, but flashpoints included GOP efforts to weaken Obama attempts to reduce air and water pollution and loosen travel restrictions to Cuba, and to ease laws regulating the financial industry. With talks continuing and current spending expiring on Saturday, Congress planned to pass legislation Friday averting a government shutdown, keeping agencies open through next Wednesday.
Separate bill for tax cuts
Negotiators were also hoping to strike a deal on a separate revenue bill that could cost $700 billion or more over 10 years by extending dozens of mostly obscure tax cuts. That package could also deliver major political victories for Obama and Ryan.
With little more than a year left in office and facing a frequently hostile GOP-led Congress, Obama was hoping an agreement would burnish his legacy by making permanent some expiring tax cuts for millions of families with lower-to middle incomes, younger children and college students. Many congressional Democrats would revel in achieving that, especially with uncertainty about which party will control both ends of Pennsylvania Avenue in 2017.
Enactment would mean "one of the strongest anti-poverty efforts in a long time," said Oregon Sen. Ron Wyden, top Democrat on the tax-writing Senate Finance Committee.
Republicans wanted to make permanent expiring business tax breaks worth perhaps hundreds of billions of dollars. Ryan and GOP lawmakers in the Senate and House would consider that alone to be a victory.
"There's nothing pushing us apart," House Ways and Means Committee Chairman Kevin Brady, R-Texas, said of bargainers' efforts to complete a deal to permanently enact tax cuts that are priorities for both sides. "So let's stay at that until we get it done."
Yet for Ryan, accomplishing that would also make one of his top 2016 priorities more affordable — an election-year bill revamping the tax code. Renewing those business tax breaks now would mean he wouldn't have to include them in next year's overhaul, freeing up money.