The Republican-dominated House of Representatives is likely to vote on extending Bush-era tax cuts, which expire Dec. 31, this summer.
The plan announced Friday by Majority Leader Eric Cantor, R-Va., is likely to have strong support in the House, but stall in the Democratic-dominated Senate. President Barack Obama has said he only wants the cuts extended for most people earning less than $250,000.
The cuts would add about $3.8 trillion to deficits over the next 10 years, according to the nonpartisan Congressional Budget Office, but supporters of the extension contend the cuts will spur enough economic growth to prod the economy and keep revenues healthy.
Here's part of Cantor's Friday memo:
Very little of what we do this summer will be able to offset the harm to small businesses if the largest tax increase in American history is allowed to go into effect on January 1, 2013. In fact, the Congressional Budget Office (CBO) warned us earlier this week that this massive tax increase will likely contribute to what would “probably be judged to be a recession.” Working families and small business should not be saddled with the uncertainty of a looming tax increase as they attempt to invest and grow for the remainder of this year.
That’s why Chairman Camp (Rep. Dave Camp, R-Mich.) and the Ways and Means Committee have been working on pro-growth reform to simplify the tax code.
Knowing that comprehensive reform will take time, we must ensure that while Congress is working to bring about competitive change, government does not increase the cost of business.
Therefore, before we leave for August, I expect to schedule a vote on legislation preventing the largest tax increase in history. The Senate should join us in providing this very basic level of certainty prior to November.