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Democrats may allow ending all Bush cuts

WASHINGTON – If Republicans insist on extending tax cuts for the rich, Democrats would be willing to let all the Bush tax cuts expire at the end of the year and carry the debate into 2013, Sen. Patty Murray said Monday.

The Washington Democrat told a crowd of about 200 at the Brookings Institution that she hoped both parties could come to an agreement that would cut spending and continue tax cuts for the poor and middle class.

If not, the tax cuts could expire at year’s end and taxes would increase for everyone at least temporarily.

“I will not agree to a deal that throws middle-class families under the bus,” she said.

Before the Bush tax cuts expire, the government will have to decide whether to extend them. Allowing them to expire at the same time spending is lowered on domestic programs and the military could push the government off a so-called fiscal cliff. Such a scenario, according to some, could trigger a new recession.

Automatic tax increases and spending cuts would take place because the Joint Select Committee on Deficit Reduction, a special “supercommittee,” could not reach an agreement.

To solve the conflict, Murray supports President Barack Obama’s plan to extend tax cuts for 98 percent of workers and 97 percent of small-business owners and then debate tax cuts for the wealthiest Americans. The Senate should vote on legislation that embodies that plan, and Senate Republicans can offer amendments if they want to vote on them, she said.

But if the budget is knotted by an effort to extend tax cuts for the rich, a deal will not be reached, Murray said.

In a panel discussion after the speech, William Gale, a Brookings economics scholar, said it might be a good idea to “go off the cliff.”

“Let the tax cuts expire,” he said. “You can get revenue out of the deal just by doing nothing.”

Gale suggested the government use the money to pay down the deficit first, then consider how to fix a tax structure that “nobody likes.”