* Democrats at odds over tax-cut strategy
* Bush-era cuts will expire this year without action
* Republicans want lower rates for all, including wealthy
WASHINGTON, Nov 18 U.S. President Barack Obama
meets leaders of his embattled Democratic Party at the White
House on Thursday as they struggle to find a way to renew
Bush-era tax cuts that are set to expire this year.
Democrats are scrambling to find consensus on the tax issue
after losing control of the House of Representatives in the
Nov. 2 congressional elections and seeing their majority in the
While Democrats and Republicans want to extend the lower
rates on the first $200,000 of a person's income, they are
divided over what to do with the top rates paid by the
wealthiest 2 percent of Americans.
Republicans want to extend the tax cuts for all income
brackets and have hardened their position, while Democrats have
split on whether to extend the lower rates for the wealthy.
The cuts, brought in by President George W. Bush, will
expire at the end of this year if Congress does not act.
Before the election, Obama supported the expiry of the
lower rates for the wealthiest, saying the United States cannot
afford tax breaks for the rich as the economy recovers slowly
from recession and the budget deficit balloons.
Since then, Obama has signaled a willingness to compromise,
suggesting a permanent extension for the lower- and
middle-class income groups and possibly a shorter-term
extension for wealthier Americans. [ID:nN16111274]
Republicans reject this approach and some liberal Democrats
are not pleased, wanting Obama to take a harder line.
"We are looking to the president to lead on this and really
stay firm," Ohio Democratic Senator Sherrod Brown said on
House Speaker Nancy Pelosi is among those who insist on
letting rates for the wealthy rise back to pre-2001 levels.
Democrats re-elected Pelosi as their leader in the House on
Wednesday, despite misgivings among some that the party needs a
new face and direction.
The picture is less clear in the Senate, where some
conservative Democrats have backed the extension of all of the
Senator Max Baucus, the Democratic chairman of the Senate
Finance Committee, has said he wants a vote on extending the
lower rates before the end of the year.
"I believe that middle-income taxpayers should get their
tax (cuts) extended, not the upper brackets. That's my view,"
(Reporting by Kim Dixon; Editing by John O'Callaghan)