By Jay Heflin - 06/30/10 10:23 PM EDT
These provisions are excluded from complying with pay-as-you-go rules if lawmakers extend them for two years, as is extending the estate tax at 2009 levels and ensuring that the alternative minimum tax does not affect middle-class workers.
But with the CBO predicting that large budget deficits would reduce national savings, drive up interest rates, and force the nation to borrow more from foreign countries, some lawmakers are thinking twice about not offsetting a two-year tax-cut extension that could amount to more than $250 billion.
Some believe that Congress should wait to decide the fate of the Bush tax cuts until after President Barack Obama's debt commission renders its recommendation on the tax breaks.
However, that recommendation is not expected until Dec. 1, which means the fate of these provisions could be decided within less than a month of most of them expiring.
The alternative minimum tax and the 2009 estate tax law have already expired. But marginal rate cuts and target tax relief for the middle class, along with tax breaks for their investments, are slated to expire Jan. 1.
Some on K Street believe waiting for the commission's recommendation would enable lawmakers to essentially "pass the buck" on how to handle the tax breaks.
But few of them think Congress can wait until December to move on the measures since the delay would likely postpone action on them until the new year — especially if the debt commission recommends that the provisions be paid for and lawmakers abide by the decision.