Length of middle class tax cut in doubt

House Democrats will extend the Bush-era tax cuts for the middle class this year, but they haven’t decided whether to extend them permanently, House Majority Leader Steny Hoyer (D-Md.) said Friday.

The length of the tax cut extension is still “under discussion,” he said.

{mosads}Hoyer said the House will likely wait for the Senate to act first before considering the tax legislation.

The tax breaks championed by President George W. Bush are set to expire at the end of the year. President Obama once called for a permanent tax break for individuals making less than $200,000 and couples making less than $250,000.

But the rising budget deficit has tampered such talk.

“We ought to have no increase in taxes on middle-income working Americans,” Hoyer said in response to a reporter’s question. “Clearly, at a time of recession, we want to make sure that working people have the ability to support themselves.”

Democrats have given themselves wiggle room on future tax rates as they try to confront the massive deficits. The $13 trillion federal debt is expected to grow by nearly $1 trillion annually for the next decade and beyond, according to non-partisan projections. Both independent and White House economists have said that path is unsustainable.

Hoyer said Friday that people with higher incomes wouldn’t get a permanent extension of the tax breaks.

“We have a severe deficit problem, and those who are doing well will not have their lives adversely affected by continuing to contribute at a rate that provides for bringing down our deficit and continues to provide for the growth of our country,” Hoyer said.

But it’s unclear whether Democrats would allow the upper-income tax rates to rise next year or later, after the economy is on more solid ground. A handful of senior Democrats in the Senate, led by Senate Budget Chairman Kent Conrad (N.D.), and centrist House Democrats have called for a temporary extension of the tax breaks for those making more than $200,000.

Conrad, who had previously backed the 2011 expiration of the upper-income tax breaks, said this week a temporary extension was the better policy to avoid stifling the economic recovery.

Hoyer made his remarks at a speech attacking Republican economic policies at the Center for American Progress.

Hoyer noted the last surplus in the late 1990s was created under President Clinton, a Democrat. He also said the stock market has grown by 600 percent more under Democratic presidents than Republican ones since the Great Depression.

“We might be able to write off that record if Republicans gave any indication that they’ve reconsidered the policies that created it,” he said.

“But, again, as they put it themselves: ‘We need to go back to the same agenda,'” Hoyer said, quoting a statement last weekend by Rep. Pete Sessions (Texas), chairman of the House Republicans’ campaign effort.