Economic growth could drop 1.4 percentage points if tax rates on the middle class return next year to their pre-Bush-era levels, the White House says in a report from its National Economic Council and Council of Economic Advisers. The warning comes as lawmakers seek a way forward on the tax cut extensions and measures to avoid $1.2 trillion in mandatory spending cuts. Meetings between congressional leaders and President Obama are set to resume this week, but have not been finalized as aides working behind the scenes remain far apart on proposals. While discussions are still warming up, some Republicans have shown a growing willingness to move away from the hard position of fighting any tax increases.
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