The White House and Republican lawmakers set the terms of a looming tax debate Sunday, coalescing around a possible temporary extension of existing income tax rates that would protect middle-class and wealthy Americans from sharp tax increases next year.
Top White House adviser David Axelrod stressed that President Barack Obama opposes a "permanent" extension of current tax rates for individuals making more than $200,000 a year and married couples making more than $250,000.
But Axelrod was carefully silent on the possibility of extending current tax rates for the short term. He said he wants to leave negotiations to Obama and members of Congress.
A compromise would put off fundamental questions about taxes for the time being, virtually guaranteeing their prominence as campaign issues heading into the 2012 presidential election. That debate also would dovetail with a more profound discussion over how to rein in deficits and reduce the nation's escalating debt.
Congress returns this week with Democrats in control of the House and Senate for a lame-duck session that is expected to stretch into December. But Republican votes are essential and the GOP has additional leverage because it will begin the new year with Republicans in charge of the House and with more members in the Senate.
Two prominent Republicans conceded Sunday that the best Congress might be able to accomplish in the coming weeks is a short term-continuation of the current tax rates, set under President George W. Bush.
"If the president wants to compromise on a two- or three-year extension ... if that's all we can get out of the president, ane he is the president, so we'll work with him on that," said Sen. Jim DeMint, a South Carolina Republican and a leader of his party's conservative wing.
Likewise, Sen. John McCain of Arizona, the Republican presidential contender in 2008, said he could fathom a short-term extension of all the tax cuts. McCain voted against the Bush tax cuts in 2004, saying they disproportionately benefited wealthy Americans.
"They should be extended until we are out of this recession," McCain said. "At such time we can look at other tax hikes. But when we're in a serious recession I cannot believe that raising taxes is a good thing on anybody."
In fact, the recession ended in June 2009, but the recovery has been markedly slow, with unemployment stuck at 9.6 percent.
Some Democrats have called for taxes to be extended for all taxpayers except those making more than $1 million. Sen. Chuck Schumer, D-N.Y., argued that such a limit would ensure that tax rates would remain the same for the middle-class and "virtually all small businesses."
Schumer said millionaires and billionaires have seen their incomes rise this decade while middle-class incomes have fallen.
Axelrod appeared on "Fox News Sunday" and NBC's "Meet the Press." McCain appeared on NBC and DeMint on Fox. Schumer spoke on CBS' "Face the Nation."
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