White House signals support for tax deal

The White House on Tuesday signaled it might be able to support a tax deal that would extend dozens of tax breaks for a year.

The measure is gaining momentum one week after the White House said President Obama would veto an earlier package of tax cut extensions that Senate Majority Leader Harry Reid (D-Nev.) had been negotiating.

{mosads}That package would have made some of the tax cuts permanent.

White House spokesman Josh Earnest said the administration does not have “as bad a view” of the emerging deal as it had of the previous one.

“There’s a significant difference between taking one element of the tax code and extending it for one year, and making it permanent,” he said. “And that certainly is a significant factor as we evaluate the proposals that are being generated by both the House and the Senate.”

Asked specifically if the administration would veto a one-year package of tax extension, Earnest sidestepped.

“I didn’t walk out here today planning to issue any veto threats, so I don’t think I’m going to,” he said. “We’re hopeful that we’ll be able to come up with something that we believe is good for middle-class families.”

Earlier Tuesday, House Minority Whip Steny Hoyer (D-Md.) said he would back the one-year House bill, although he said he preferred a two-year extension offered by Senate Democrats. 

“It does give, then, time over the next year to address what all members say needs to be addressed — and that is a comprehensive tax reform [bill],” Hoyer said.

Treasury Secretary Jack Lew, who met with House Democrats earlier on Tuesday, stopped short of endorsing the plan but also indicated he preferred a short-term extension.

The White House was upset that the previous deal negotiated by Reid and House Ways and Means Committee Chairman Dave Camp (R-Mich.) did not include the permanent extension of the Child Tax Credit and the Earned Income Tax Credit, both of which help low-income families.

“The president took a pretty dim view of proposals that would shower significant tax benefits on well-connected corporations without providing much relief to working people in this country,” Earnest said. “The president thinks that an approach like that is both unfair and bad economic policy.”