Reid Willing to Listen on Tax Cuts - But Making Them Permanent "Won't Happen"

AP Photo

AP Photo

Senate Democrats, having lost at least six seats to Republicans in this year's elections, are showing only a glimmer of compromise on the the Bush tax cuts which are set to expire on Dec. 31.

After a noon conference call with his caucus, Senate Majority Leader Harry Reid, D-Nev., fresh off his own hard-fought re-election, told reporters, "The one thing that we are focused on like a laser is that we are going to cut taxes for the middle class. Now, I would hope that the Republicans will not block that."

But Republicans have repeatedly said that is not good enough and have introduced legislation to make all of the tax cuts permanent, saying a recession is no time in which to raise taxes.

It seems everything old is new again. This is the exact same rhetoric and fight we heard before the election.

The defiance of the majority leader belied the party's losses for the evening, as the chamber movees ever closer to a 50-50 split. But Reid showed only a glimmer of compromise, while slamming the door, emphatically, on making all of the cuts permanent. "We are not ostriches with our head in the sand someplace. We're willing to pull our head out and look around if they have some better ideas. But I think that the legislation introduced by my counterpart, Mitch McConnell, where you extend everything indefinitely, that's a road to a $4 trillion addition to the debt that we have, and that won't happen," Reid said.

President Obama, who called his party's election night defeat "a shellacking," echoed Reid's sentiments on the tax cuts Wednesday, leaving the door only slightly ajar on a compromise, saying, "My goal is to make sure that we don't have a huge spike in taxes for middle-class families. Not only would that be a terrible burden on families who are already going through tough times, it would be bad for our economy. It is very important that we're not taking a whole bunch of money out of the system from people who are most likely to spend that money on, you know, goods, services, groceries -- you know, buying a new winter coat for the kids."

But Reid's job is now more difficult as he heads into a lame duck session in mid-November with three new members in the chamber, all of whom have said the tax cuts should at least be extended temporarily.

A senior Senate Democratic aide tells Fox, "Nothing has been decided. The only thing that everyone agrees on is to extend the tax cuts for the middle class. What, if anything else, will be done will be subject to negotiations with the Republicans."

The aide said the tax cuts debate is only "likely" during lame duck, "but next steps must still be discussed."

A number of Democrats and Republicans have suggested extending the trop brackets at least temporarily. That could be where a compromise is found, but the aide would not concede that point.

The president said he would meet with bipartisan Congressional leadership "some time in the next few weeks and see where we can move forward."