Could the Bush tax cuts really expire?

Democrats want to extend tax cuts for the middle class. The GOP wants extend them for rich people, too. What happens if the parties can't reach a compromise?

Harry Reid said the Senate would vote to extend only the middle-income tax cuts by September, but campaign politics delayed the debate.
(Image credit: Getty)

Now that the elections are over, Congress can no longer put off a decision on extending the Bush-era tax cuts, which are set to expire at the end of the year. Leading Democrats, who control the House until the GOP takes over in the new year, insist it's time to cut off the breaks for the wealthiest two percent of taxpayers, while extending them for the middle class. Republicans are warning that they won't back down from their demand that the reductions be extended for the wealthy, too. Is it possible that both sides will dig in, and the tax cuts will run out for everyone? (Watch a Fox Business discussion about the fax cuts' future)

The coming showdown really could kill the cuts: In this toxic political atmosphere, says Michael Scherer at Time, anything could happen. Republicans are united in their insistence that the tax cuts must be extended for everyone. Democrats say it's unwise to continue giving the wealthy breaks that will cost the government $700 million over the next decade — but enough senators in their caucus are wavering that the Democrats can't win. If they don't back down, the cuts will expire.

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