With Deal in the Works on Taxes, Senate Churns Towards Christmas Break

By Jenny Schlesinger

Dec 6, 2010 9:15am

ABC News’ Matthew Jaffe reports:  Senate Majority Leader Harry Reid intends to wrap up the year's work by Dec. 17, leaving lawmakers two more weeks to resolve two pressing issues – taxes and government funding – and possibly a slew of others.  The most pressing issue, of course, is the expiring Bush tax cuts. As expected, Senate Democrats failed in their two symbolic middle-class tax cuts votes on Saturday. The question now is no longer whether or not they will be extended for all Americans including the wealthy – it's a given that Republicans have won out in making sure they are – but rather what concessions Democrats will get in return.  As ABC News’ Jon Karl has reported, under a possible compromise plan that could be announced as early as Monday but likely closer to mid-week, the tax cuts would be extended for everybody including the wealthy for at least two years. In return, the Republicans' concession to Democrats would be to extend unemployment insurance for the long-term jobless for at least one year.  The White House would also like to extend the Making Work Pay tax credit, a stimulus program that gave $400 a year to individuals – and $800 to households – with incomes under $75,000.  But an extension would cost $60 billion for one year, leaving it up in the air if Republicans will agree to it.  But the White House’s decision to reverse its long-standing position and give in to the GOP’s wishes not to raise taxes on the wealthy could leave Senate Democrats fuming.  “We're moving in that direction. And we're only moving there against my judgment and my own particular view of things,” the Senate’s number-two Democrat Dick Durbin said yesterday on CBS’s “Face the Nation.”  “At a time when we have a $13 trillion national debt, the idea that you would give huge huge tax breaks to millionaires and billionaires and drive up that national debt is to me incomprehensible and I hope that we hold the line and make sure that that doesn't happen,” Sen. Bernie Sanders, an independent from Vermont who caucuses with Democrats, said last week.    But it now seems more and more apparent that that will happen. Now, only weeks away from a new Congress that will see them gain control of the House and six seats in the Senate, it is Republicans who are sounding victorious about the impending tax cut compromise from the White House.  “We've had more conversations in the last two weeks than we've had in the last two years,” the Senate’s top Republican Mitch McConnell said Sunday on NBC’s “Meet the Press.” “And I think that's a good sign, growing awareness that the power is going to be more symmetrical in the next Congress. And I'm optimistic we'll be able to come together.”  In addition to taxes, the other must-do matter for Congress is to keep the government running once the latest continuing resolution ends on Dec. 18. Democrats in the House and Senate would like to pass an omnibus spending package or another continuing resolution to fund the government until the end of fiscal year 2011, but Republicans are pushing for a short-term extension only lasting for the first few months of 2011, giving them the chance to use their control of the House to wield more power in the funding process. Whatever happens, somehow someway lawmakers will need to prevent a government shutdown in the coming weeks.  Finally, there are a number of lower-profile issues that the Senate will also be working on this week. On Tuesday they will take up the impeachment of Thomas Porteous, a federal judge from Louisiana impeached by the House on corruption charges. If two-thirds of the Senate votes to convict him, Porteous would become the eighth federal judge to be impeached.  On Wednesday morning Reid plans to hold votes on the DREAM Act to grant legal status to young illegal immigrants who go to college or join the military, a 9/11 firefighters bill, and a $250 cost-of-living adjustment for senior citizens. On top of that, Reid is still hoping to move forward on the annual defense authorization bill that includes a repeal of the military's Don't Ask, Don't Tell policy. And then there’s the START nuclear treaty with Russia, which the White House has called its top foreign policy priority for the lame-duck.  Taxes. Government funding. START. Jobless benefits. Don't Ask, Don't Tell. Immigration. An impeachment trial. And more. An ambitious to-do list, for sure, and one highly unlikely to be completed in the next two weeks. But if at least a tax hike and a federal shutdown can be avoided, then that might be enough for lawmakers to wrap up the lame-duck session and head home for the holidays.

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