Congress facing tax hikes, defense cuts

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WASHINGTON, Aug. 2 (UPI) -- Congress, facing the year-end expiration of the Bush tax cuts, is considering extending them for another year so it can overhaul the Tax Code, observers say.

Rep. Patrick Tiberi, R-Ohio, a member of the House Ways and Means Committee, said an extension of the tax breaks enacted during George W. Bush's presidency would give Congress the time it needs to deliberately revise the Tax Code, rather than tackle it willy-nilly, Politico reported Wednesday.

"There's a two-tier track here," Tiberi said. "Give us a year -- for purposes of doing tax reform next year -- of keeping everything the same on the [2001 and 2003 tax rate reductions]. Don't let tax rates go up and give us the year to do tax reform."

Observers and cynics note the two-track strategy is nothing new for this Congress, pointing out that nearly every major piece of legislative business done included buying time with a short-term fix while pushing off larger fiscal questions to some future date.

The reason is simple: A deeply divided Congress cannot reach agreement, Politico said. As demonstration of the depth of disagreement, the Republican-controlled House this week passed an extension of all Bush tax cuts, while the Democratic-run Senate passed a bill allowing the lower tax rates for wealthy taxpayers to expire.

In fact, Senate Majority Leader Harry Reid, D-Nev., was less than receptive Wednesday to House Speaker John Boehner's offer to reconvene the House if the Senate passed legislation that would avert the so-called "fiscal cliff" of pending tax rate increases and steep cuts to the Pentagon, The Hill reported.

In his response, Reid chided the House Republican majority for using valuable session time for "empty, political show votes, while ignoring major job-creating legislation passed by the Senate on a bipartisan basis."

Earlier Wednesday, Boehner, R-Ohio, and three other House GOP leaders wrote to Reid urging the Senate to take action to avoid the looming tax hikes and defense cuts at the end of the year.

Beyond the Bush tax cuts, Congress must also address with a federal debt that is approaching its limit, an estate tax due to expand and spending cuts from last year's fight to raise the debt ceiling, Politico said.

Some lawmakers -- especially freshman House Republicans -- said they are worried about what type of give-and-take will occur in the lame-duck session.

"We shouldn't do anything that's half-baked in this lame-duck session," Rep. Diane Black, R-Tenn., told Politico. "One of my fears is that when we get in there, somehow there will be some horse trading and we'll say that's tax reform and we're done. I'm looking for a way to make sure that my colleagues ... are all together in one unified voice in saying, 'No, we want true tax reform.'"