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Durbin Indicates Deal Is Near on Extending All Tax Cuts

Senate Majority Whip Dick Durbin (D-Ill.) said Sunday that Democrats and Republicans are headed toward a deal to extend the 2001 and 2003 tax cuts for all income tax brackets, possibly before the cuts expire at the year’s end.

Despite protests to the contrary from Congressional Democratic leaders, Durbin conceded Sunday that the Republicans will probably achieve what they have been seeking: an across-the-board extension of current tax rates. The day before, two Democratic plans to exclude higher income tax brackets from an extension were rejected in votes on the Senate floor. One would have excluded income above $250,000, while the other would have excluded income above $1 million.

Senate Minority Whip Jon Kyl (R-Ariz.) said Republicans would agree to support another extension of unemployment benefits as a part of a deal. Durbin described that element as crucial, saying that most Democrats remain highly opposed to extending the current tax rates for higher incomes, whether it be for annual earnings above $250,000 or above $1 million.

“I can tell you that without unemployment benefits being extended, personally, this is a non-starter,” Durbin said on CBS’ “Face the Nation.” “The notion that we would give tax cuts to those making over $1 million a year, which is the Republican position, and then turn our backs on 2 million Americans who will lose unemployment benefits before Christmas — 127,000 in the state of Illinois — is unconscionable.”

Immediately following Saturday’s Senate votes, Democrats sounded ready to keep fighting, even if that means allowing the current tax rates to return to their previous higher levels Jan. 1.

But Sen. Ron Wyden (D-Ore.), speaking on CNN’s “State of the Union,” gave credence to Durbin’s suggestion that a bipartisan deal to extend the tax rates for all income tax brackets will be the likely outcome of this debate. “Much of my party doesn’t want to extend the Bush tax cuts at all,” Wyden said. “I’m offering to go along with an extension for a year.”

Kyl has been participating in bicameral, bipartisan talks with the White House on the tax cuts, and the Arizona Republican said he is confident that those talks will yield a deal that the GOP can support before Christmas.

“I think that most folks believe that the recipe would include at least an extension of unemployment benefits for those that are unemployed and an extension of all of the tax rates for all Americans for some period of time,” Kyl said on “Face the Nation.”

Senate Minority Leader Mitch McConnell, speaking on NBC’s “Meet the Press,” confirmed that Republicans are prepared to support an extension of unemployment benefits as part of an agreement to extend the current tax rates for all taxpayers.

“I think we will extend unemployment compensation,” the Kentucky Republican said. “We’ve had some very vigorous debates in the Senate, not about whether to do it but whether to pay for it, as opposed to adding it to the deficit. All of those discussions are still under way.”

Ratification of the new Strategic Arms Reduction Treaty with Russia, a priority for President Barack Obama, is another matter.

Kyl, the lead GOP negotiator on START, which requires 67 votes for ratification, indicated that the Obama administration and Senate Republicans could be headed toward an agreement on the substance of the treaty and related policy issues. But the Senate Minority Whip expressed doubt that there was adequate time remaining in the lame-duck session to debate the document.

Several Senate Republicans, including the incoming freshman class, are urging GOP leaders to ensure that START is delayed until 2011 to allow more time for debate and consideration.

“There is not time to do it in the lame duck when you consider all of the other things that the Democratic leader wants to do,” Kyl said.

Durbin, a strong supporter of START ratification, disagreed. “It’s important to do it now,” he said.

But Senate Foreign Relations ranking member Dick Lugar, who supports ratification of START and would prefer that it be finished in the lame duck, said the Democrats’ list of other legislative priorities this month could stand in the way.

The Indiana Republican said on “State of the Union” that Senate Majority Leader Harry Reid (D-Nev.) needs to shorten the Democrats’ wish list to ensure that there is enough time to debate START. Republicans sent a letter to Reid last week saying they want the Senate to first tackle the tax cuts and then a government spending bill before moving on to other matters in the lame-duck session, such as START.

“The problem with this, I think, is that Senator Reid, the Majority Leader, has found that many Democrats don’t want something quite that abrupt,” Lugar said. “They say we made a lot of promises out on the campaign trail.”