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GOP forges deal on tax cuts

By ASSOCIATED PRESS
Published May 10, 2006

WASHINGTON - Republicans in Congress reached agreement Tuesday on a $70-billion measure to extend tax breaks for investors and prevent more middle-income families from being hit by a tax aimed at the wealthy.

The bill would be a victory for President Bush on one of his top tax priorities, a two-year extension of the reduced 15 percent tax rate for capital gains and dividends, currently set to expire at the end of 2008. Republicans credit the tax cuts, enacted in 2003, with boosting economic growth and creating many jobs.

The measure also would keep 15-million families from being hit this year with the alternative minimum tax, which was designed to make sure the wealthy paid taxes but is ensnaring more and more middle-income families because it is not indexed for inflation.

The accord paves the way for House approval of the measure as early as Wednesday. The Senate could clear the bill for Bush's desk by week's end.

"This is a responsible bill that protects families and small-business owners from tax increases, while also providing investors with a bigger window of certainty - critical to continued economic growth," said Ways and Means Committee Chairman Bill Thomas, R-Calif.

Critics, mostly Democrats, have said the tax rate reductions on dividends and corporate profits are tilted to the wealthy. Some have said the provisions should not be extended at a time of large budget deficits and huge spending for the war in Iraq.

The development capped weeks of often difficult talks between GOP lawmakers as they wrangled over how to advance their party's tax agenda. Under budget rules, only $70-billion in cuts can be advanced under fast-track rules that would prevent a possible filibuster by Senate Democrats.

CIA nominee meets with lawmakers

WASHINGTON - President Bush's CIA nominee, Gen. Michael Hayden, canvassed Capitol Hill on Tuesday addressing Republican and Democratic concerns about a military officer running the civilian agency and about his close ties to the warrantless surveillance program.

In a break with the White House, House Speaker Dennis Hastert, R-Ill., said he was surprised by the nomination and concerned about Hayden's background.

"I don't think a military guy should be head of CIA, frankly," Hastert said. "I don't know anything about him."

During the 36 hours since Hayden's nomination was announced, the White House said the general had called more than 25 members of Congress and was meeting with others this week.

CIA director Porter Goss announced his resignation Friday, offering little explanation. Officials have said he had conflicts with national intelligence director John Negroponte and Hayden."

Judge won't seal Democrat's documents

McLEAN, Va. - A federal magistrate rejected efforts by a Louisiana congressman, the subject of a bribery investigation, to keep potentially embarrassing documents under seal.

Rep. William Jefferson, a Democrat who represents New Orleans, is the target of an investigation that has already resulted in guilty pleas by two associates. Jefferson has not been charged and denies wrongdoing.

The documents are scheduled to be unsealed Thursday, but that will be delayed if Jefferson or someone else appeals the ruling.

Jefferson's lawyer, Robert Trout, declined to comment Tuesday.

[Last modified May 10, 2006, 06:56:09]