Republicans reject tax deal at White House
WASHINGTON (Reuters) - Republicans rejected a tax deal at a White House meeting on Thursday that would have boosted the economy in the short term and closed a number of tax breaks for businesses and wealthy people, Democrats said.
The deal would have avoided an overall increase in the U.S. tax burden, Democratic officials said, to satisfy Republican demands that a wide-ranging budget deal not include tax hikes.
Negotiators have been unable to resolve the tax issue as they try to extend the government's borrowing authority and avert a looming default.
Representative Eric Cantor, the No. 2 Republican in the House of Representatives, said last week that his party could support closing some tax breaks if the extra money they would bring the government was offset by other tax cuts.
At the meeting, Obama offered to close tax breaks for oil and gas companies, corporate jet owners, hedge fund managers, ethanol producers and wealthy people who take tax write-offs, the officials said.
Obama said he would pair that with an extension of a payroll tax cut that expires at the end of this year in order to boost the shaky economy, officials said.
Republicans rejected the offer on the grounds that the payroll tax cut is temporary but the tax-break repeals are permanent, one official said.
Obama also asked to extend enhanced unemployment benefits through 2012, which would cost $40 billion, but was rejected by Republicans, the official said.
Republican aides declined to comment.