White House negotiators will begin meeting with leaders from both political parties in Congress Wednesday in an effort to hammer out a compromise on the expiring Bush era tax cuts.
Treasury Secretary Timothy Geithner and budget director Jacob Lew are set to huddle with Democrats Sen. Max Baucus (Mont.) and Chris Van Hollen (Md.) and Republicans Sen. Jon Kyl (Ariz.) and Dave Camp (Mich.) one day after President Obama announced the negotiations, according to a White House official.
Even though Speaker-designate John Boehner (R-Ohio), Senate Minority Leader Mitch McConnell (Ky.) and Obama expressed a willingness to work together after the huddle, both sides were not able to reach a deal on the tax cuts, only securing an assurance to talk again.
Democrats, who are divided on what to do with the cuts, plan to hold a vote this week on extending only the tax cuts for the middle-class, letting end the cuts for high income earners. But Republican leaders have said that such a proposal does not have the votes to pass.
Republicans want to extend all the cuts permanently, but their new majority does not kick in until next year, which is after the tax breaks disappear. Coming off a major victory on Election Day, the GOP has come under pressure from their base, which includes Tea Party activists, to hold firm on their plan.
Obama has faced similar pressure from liberals to let the cuts for the wealthy expire.
Baucus is the chairman of the Senate Finance Committee, which has jurisdiction over taxes, and Kyl is a senior member of the panel and the second-ranking Senate Republican. Camp is the incoming chairman of the House tax-writing committee and Van Hollen is set to become the top Democrat on the budget panel.
Sam Youngman contributed to this report.