House Democrats refuse to budge on tax relief bill

House Democrats said Monday they would not relent in their dispute with the Senate on a major tax relief package, increasing odds that businesses could lose out on critical tax breaks and millions could get hit by the alternative minimum tax this year.

House Majority Leader Steny Hoyer, D-Md., suggested it might be next year before consensus can be reached on a tax initiative that includes adjusting the AMT, providing tax relief to disaster victims and extending tax credits for renewable energy development, business investment and individual education and child care costs.

The House had intended to adjourn for the year Monday. But that plan abruptly changed when lawmakers rejected the $700 billion financial bailout legislation, forcing congressional and administrative leaders to regroup.

Lawmakers in both the House and Senate stressed that the tax relief bill would create tens of thousands of jobs and contribute to the nation's energy independence. But House Democrats insisted that more of the package, totaling $138billion in House bills, be paid for so as not to increase the deficit.

Senate Republicans, averse to new taxes, said any changes in the Senate-passed tax bill would kill the entire package.

The House “has taken the morally and fiscally responsible position,” said Rep. Mike Ross, D-Ark., a leader of the 49-member Blue Dogs, a group of fiscally conservative Democrats.

Meanwhile, “Republicans in the Senate continue to hold up this important legislation,” he said.

As Ross spoke, across the Capitol Senate Majority Leader Harry Reid, D-Nev., tried to bring up a House-passed bill dealing with renewable energy and extension of business and individual tax breaks that expired last year or will lapse at the end of this year. Republicans objected to consideration of the bill.

Reid acknowledged that “we can't get it done” because Senate Democrats don't have the votes to move the bill without GOP cooperation. He said he hoped the Blue Dogs “would understand we are not trying to embarrass them or anyone else.”

The Senate still plans to meet later in the week before leaving for the year and could conceivably try to take up the House-passed AMT fix separately.

Without congressional action, those affected by the AMT, originally aimed at just a few very rich tax dodgers, would grow from about 4 million to up to 26 million.

Those hit by the tax, most earning less than $200,000, would pay an average extra tax of $2,000.