House passes middle class tax rates bill

WASHINGTON, Dec. 2 (UPI) -- The U.S. House of Representatives Thursday approved a bill that would permanently extend current tax rates that Democrats say benefit the middle class.

The vote was 234-188 to make permanent tax rates enacted during the George W. Bush administration for individuals earning up to $200,000 and couples earning $250,000, among other things. The measure now goes to the Senate.

The White House issued a statement reiterating its support for the action.

"The President continues to believe that extending middle class tax cuts is the most important thing we can do for our economy right now and he applauds the House for passing a permanent extension," the statement from the press office said. "But, because Republicans have made it clear that they won't pass a middle class extension without also extending tax cuts for the wealthy, the president has asked (budget) Director (Jack) Lew and (Treasury) Secretary (Tim) Geithner to work with Congress to find a way forward. Those discussions started just yesterday and are continuing this afternoon. The talks are ongoing and productive, but any reports that we are near a deal in the tax cuts negotiations are inaccurate and premature."

During debate, House Democrats accused Republicans of holding middle-class Americans hostage by demanding that the current tax rates -- set to expire at the end of this year --- be extended for all Americans, while the GOP claimed the bill would be a job killer by failing to extend the current rates for wealthy taxpayers.

"What this bill does," House Majority Leader Steny Hoyer said, "is make sure the first $250,000 is not subject to a tax increase."

Hoyer said he believes both sides support that concept, "but we don't have agreement on other elements" with some lawmakers saying the bill "doesn't do enough."

Some in Congress "have been holding hostage" American policy until there is an "agreement of 100 percent," the majority spokesman said.

House Speaker Nancy Pelosi said it was "grossly unfair" for Republicans to demand an extension of unemployment benefits be funded while not funding a tax cut for upper-income taxpayers that economists say would add $700 billion to the federal deficit.

"To say this is not the right thin to do is not the right thing to say," Pelosi said of the measure's critics.

"There will be no tax bill for any situation unless there is a tax cut for the middle class," Pelosi, D-Calif., said.

During debate, House Minority Whip Eric Cantor, R-Va., called the tax rate extension measure a "job killer" and urged Pelosi to "stop the gimmicks."

Cantor said Democrats and Republicans who met with President Obama earlier this week set aside their party gamesmanship and rhetoric to work toward bipartisanship.

The message, he said, "has not been sent to some in the majority today."

Senate Majority Leader Harry Reid said the chamber was in a wait-and-see mode until the House acted on the measure.

"We're trying to work through off of this," Reid said.

Views about what a final bill could look like were "ranging, but not wide ranging," Reid said.