Post Midterms, Parties Signal Willingness to Compromise on Taxes

Nov. 9, 2010— -- When Congress returns on Monday for a lame-duck session devoted to taxes and spending, the key question for lawmakers will be what to do about the expiring Bush tax cuts. But whereas when lawmakers left town in September with little common ground in sight, they will return with both sides talking compromise.

Last week President Obama first sounded a conciliatory tone in his post-election press conference at the White House, a message he reiterated over the weekend.

"I recognize that both parties are going to have to work together and compromise to get something done here. But I want to make my priorities clear from the start. One: middle class families need permanent tax relief. And two: I believe we can't afford to borrow and spend another $700 billion on permanent tax cuts for millionaires and billionaires," the president said in his weekly address.

That is how much the White House says it will cost to extend the Bush tax cuts for all Americans, not just those making under $200,000 a year as the administration would prefer.

But Republicans have held their ground, arguing against raising taxes for anyone as the country emerges from a severe recession. With Democrats now weakened by the midterms' resounding defeat that saw them lose the House altogether and six seats in the Senate, a compromise now appears likely.

In September Rep. John Boehner, the likely future Speaker of the House, proposed extending the tax cuts for the wealthiest Americans for two more years, while at the same time reducing discretionary spending to 2008 levels.