But for now, he said, the focus has to be on solving the immediate crisis of tax increases for virtually every American that would “hurt middle-class families, and it would hurt the businesses that depend on your spending.”
Negotiators remained in their Capitol offices long past sundown Saturday trying to seal a bipartisan deal that would preserve tax cuts adopted during the Bush administration for the vast majority of Americans, adding at least $3.5 trillion to the federal debt over the next decade.
Negotiations were focused on whether the Bush tax cuts should be permitted to lapse on income over $250,000 a year, as Obama vowed during his campaign, or on income over $400,000, a threshold that would affect only the top tax bracket and many fewer households.
Senate Republicans have signaled support in recent days for the higher threshold, which Obama endorsed in failed negotiations with Boehner earlier this month. Compared with GOP plans to extend the Bush reductions for all taxpayers, letting them lapse on income over $400,000 would raise about $600 billion over the next decade, according to White House estimates — barely a third of the $1.6 trillion Obama initially hoped to extract from high-income households to help reduce record budget deficits.
Negotiators were trying to resolve a dispute over the estate tax, a critical issue for Republicans who have dubbed it the “death tax” and argue that it punishes people who build successful businesses and family farms.
In an agreement brokered between McConnell and the White House in 2010, estates worth more than $5 million are exempted and taxed above that amount at 35 percent. Republicans want to maintain that structure, while Democrats want to drop the exemption to $3.5 million and raise the rate on larger estates to 45 percent.
Aides close to the talks predicted that the two sides might split the difference, with Democrats swapping the estate tax for the $250,000 threshold.
Rosalind S. Helderman and Ed O’Keefe contributed to this report.