Van Hollen: Congress likely to extend Bush-era tax cuts before election

Rep. Chris Van Hollen (D-Md.), who runs the House Democrats’ campaign arm and also serves as an assistant to Speaker Nancy Pelosi (D-Calif.), told The Hill in an interview he expected several middle-class tax cuts to be extended before the midterm election.

But it’s unclear whether Congress will allow tax cuts on the wealthy to expire.

House leaders have long said they want to extend a tax break that benefits married couples and increase the child tax credit. They also have said they want to extend tax cuts for individuals earning less than $200,000 and for couples earning less than $250,000.

These cuts are all set to expire at the end of the year.

Acting Ways and Means Committee Chairman Sandy Levin (D-Mich.) has told reporters he would begin the process of extending those measures after the Easter Recess.

Upper-income tax breaks also are set to return to pre-2001 levels in 2011. President Barack Obama’s budget would allow those tax cuts to expire.

Democrats in vulnerable districts might have trouble supporting the expiration of these tax breaks in the run-up to the election.

“I think the economic recovery is sufficiently fragile that I don’t think this is the right time to be rescinding tax cuts,” Rep. Gerry Connolly (D-Va.) told The Hill.

Connolly represents one of the country’s wealthiest districts. During the House healthcare debate, he joined several other liberal members in opposing the bill’s surtax because it negatively affected small-business owners. Their resistance forced House leaders into changing the tax so it only hit the super-wealthy.

Extending tax breaks for only the middle class might re-ignite the intra-Democratic tensions that flared up during the healthcare debate.

Pro-business Democrats could once again argue that continuing tax breaks for the middle class will hurt small-business owners unless upper-income tax cuts are extended as well. Their battle would be uphill, however, since offsets are required to extend tax breaks for wealthier taxpayers.