Democrats Call GOP's Bluff With Vote To Extend Middle Class Tax Cuts

WASHINGTON - Democrats and Republicans are working to reach a deal to extend Bush-era tax cuts that expire at the end of the year, but neither side is budging as negotiations begin in earnest.

Even as they talk, House leaders are planning to hold a politically charged vote Thursday to extend middle-class tax cuts while letting taxes for the wealthy rise, an action that some believe could threaten the still ongoing deliberations over a long-term solution.

At a briefing with reporters, House Majority Leader Steny Hoyer said that bringing the legislation -- which is set to include a pay-as-you-go requirement -- to the floor would not affect the bipartisan talks.

"I talked to Mr. Van Hollen, [the congressman representing House Dems in the negotiations] and he and I both agree that this matter moving forward should not undermine negotiations on a compromise," Hoyer claimed. "I'm hopeful that we will able to pass that bill unanimously because the American public wants us to find places for agreement."

Hoyer also has expressed some desire to package the potential extension of tax cuts for the wealthy with legislation that would extend unemployment benefits, a measure that failed to pass a Senate vote last week.

Outgoing Speaker of the House Nancy Pelosi matter-of-factly addressed the new decision.

"To show our position very clearly that Democrats support tax cuts for the middle class. We think it is fairer thing to do and is necessary at this time in our economy," Pelosi said, according to CNN.

The GOP, however, appear less optimistic. In a statement to NBC News a senior GOP leadership aide responded:

"This announcement that House Democrats will vote to raise taxes on American families and small businesses clearly violates the spirit of the White House meeting yesterday and undermines efforts to reach a real solution to protect the American people from the January 1 tax hikes."

Rep. Dave Camp (R-Mich.) who is currently representing House Republicans in the ongoing bipartisan summit, responded to the news with similar concern.

"Now is the time for serious negotiations, not political stunts," he said, according to Fox News. "This is disappointing and a sign of bad faith after the president agreed to bipartisan, bi-cameral talks. There will be bipartisan opposition to the Democrats' push to raise taxes on small business."

But the bill, even if it passes the House, stands no chance in the Senate, which led House Minority Leader Eric Cantor Wednesday to call Democrats' move to force a vote on the matter "nothing more than political chicanery and undermines the President's ongoing discussions and efforts on tax rates."

Nevertheless, Senate Majority Leader Harry Reid, D-Nev., said he is considering holding a similar vote.

A small working group of administration officials and lawmakers from both parties began meeting Wednesday morning to negotiate a deal on tax cuts. They emerged after nearly two hours to say they had agreed to continue talking later in the day.

"No surprises," Treasury Secretary Timothy Geithner said. "We went through everything on the table, and we agreed we were going to come back this afternoon late in the day and continue the conversations. And we also agreed it's very important that we're not to characterize discussions in the room."

Obama and Democratic leaders in Congress want to extend tax cuts for individuals making less than $200,000 and married couples making less than $250,000. Republicans and some rank-and-file Democrats want to extend the tax cuts for everyone.

Obama signaled he was ready to compromise after elections in which Republicans won control of the House and gained seats in the Senate. But the president has yet to make a detailed proposal.

Senate Republicans, meanwhile, said they intend to block action on all Democratic-backed legislation until the Senate votes to the fund the government and prevent the looming tax increases, according to a letter to Reid signed by all 42 Senate Republicans.

If carried out, that strategy could doom Democratic-backed attempts to end the Pentagon's practice of discharging openly gay members of the military service and give legal status to young illegal immigrants who join the military or attend college.

Reid has made both measures a priority as Democrats attempt to enact legislation long sought by groups that supported them in the recent midterm elections.

Republicans have little incentive to make major concessions in December, considering their power on Capitol Hill will greatly increase in January. Democrats still control both chambers until the end of the year, but they need Republican votes in the Senate to pass a tax bill.

"If President Obama and Democratic leaders come up with a plan in the lame-duck session to cut spending and stop all the tax hikes, they can expect a positive response from Republicans," said House Republican leader John Boehner of Ohio, who is in line to become the new speaker in January. "If the lame-duck Congress is unable or unwilling to act, the new House majority will in January."

The president appointed Geithner and Budget Director Jacob Lew to the tax negotiating group. Rep. Dave Camp of Michigan, the top Republican on the House Ways and Means Committee, will represent House Republicans and Rep. Chris Van Hollen of Maryland will represent House Democrats. Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, will represent Senate Democrats; Sen. Jon Kyl of Arizona, the second ranking GOP leader in the Senate, will represent Senate Republicans.