The top Republican in the U.S. House of Representatives on Wednesday said he was firm in backing permanent lower tax rates for all income groups, including the wealthy, setting up a showdown with President Barack Obama.
"Extending all of the current tax rates and making them permanent will reduce the uncertainty," said Representative John Boehner, when asked about potential compromise when he meets with Obama next week.
Boehner, in line to take control as House speaker, and other leaders will meet Obama next Thursday to hash out potential areas of agreement when Republicans take over the House in January.
Tax cuts enacted under former President George W. Bush, which are set to expire at the end of the year, are expected to be a major topic at the meeting.
As lawmakers prepare to return to Washington next week for a post-election session, Republicans are privately considering backing a two-year extension of the Bush-era tax cuts for all income levels, lawmakers and analysts say.
But publicly Republicans are still taking a hard line on permanence. Of key importance to them is keeping the lower rates for the wealthy linked to lower rates for the middle class.
Most Democrats want to separate the issue of tax cuts for individuals making less than $200,000 and families making less than $250,000 from cuts for those with higher incomes, thinking it will be tougher for Republicans to defend lower rates for the rich next time they expire.
Before the election, Obama opposed extending cuts for the rich at all, arguing that would create an unacceptable increase in the $1.3 trillion budget deficit.
The White House last week said it was open to talks with Republicans to extend all of the lower tax rates, but it said any extensions for the wealthy must be temporary.
Separately, the presidential deficit commission is set to announce a series of recommendation from its bipartisan chairman this afternoon, which will likely include recommendations on tax policy, though it is unlikely to take the Bush era cuts straight on.
Some Democrats back a two-year extension of all rates, with the hope that lawmakers would work on an overhaul of the byzantine tax code in the meantime.
"I would extend short term," Democratic Senator Kent Conrad said on Tuesday. During that period lawmakers could work on "thorough tax reform. We have a tax system that just doesn't fit the world we live in today."