Middle-class tax cuts may not last, Dem suggests

WASHINGTON — House Majority Leader Steny Hoyer tiptoed into dangerous political territory Tuesday, suggesting that to cut the government's record budget deficits dramatically, popular middle-class tax reductions set to expire at year's end could be extended only temporarily.

Hoyer, a Maryland Democrat, also suggested that future Social Security benefits may have to be trimmed to contain the national debt. Those calls from the House of Representatives' second-ranking Democrat, at a Washington budget conference, were seen as an important political step as well as a legislative trial balloon.

Congressional Democrats are being pulled in two different fiscal directions. Most Bush-administration tax cuts expire at the end of this year, and extending them would be popular before November's congressional elections. Voters also are signaling, however, that they want to curb federal deficits and the national debt, both of which exploded over the past decade, especially since the recession of the past few years.

"As the House and Senate debate what to do with the expiring Bush tax cuts in the coming weeks," Hoyer said, "we need to have a serious discussion about their implications for our fiscal outlook, including whether we can afford to permanently extend them before we have a real plan for long-term deficit reduction."

Hoyer added, however, that as long as the economy is struggling to recover, "I don't think this is the time to increase taxes" on middle-class people. Congress is expected to let tax reductions for the wealthy expire at year's end.

Hoyer also discussed ways to curb future government spending, saying, "We could and should consider a higher retirement age or one pegged to life span, more progressive Social Security and Medicare benefits, and a stronger safety net for the Americans who need it most."

The age when Social Security recipients can receive full benefits varies depending on the year of birth. For those born from 1943 to 1954, for instance, the age to qualify for full benefits is 66. It increases gradually for those born in 1955 and later. For people born in 1960 or later, the age is 67.

Budget experts consider slowing the growth of "entitlements," led by Social Security and Medicare, crucial to reducing future deficits and the national debt. The nonpartisan Congressional Budget Office projects that debt held by the public will rise from 53 percent of the nation's gross domestic product in 2009 to 90 percent by 2020. It was 40 percent in 2008.

President Obama has supported making the Bush-era tax breaks permanent for individuals who earn less than $200,000 a year and joint filers who make less than $250,000. Permanently extending those tax cuts would cost an estimated $2.15 trillion over the next decade, however, when the nation faces $9.76 trillion in deficits, according to the CBO.

A bipartisan commission appointed by Obama and Congress is studying ways to reduce the debt.