The deal announced just after midnight Wednesday by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Orrin Hatch (R-Utah) extends long-standing provisions of the so-called tax extenders package like the research and development tax credit, which has been in place off and on for decades.
To strike a deal, however, committee leaders agreed to let 25 percent of current tax breaks expire in order to appease Republicans who warned that the overall cost of the package had to be kept in check.
The package still represents a victory for the various business lobbying interests that press Congress each year to keep their special perks in the tax code.
Baucus and Hatch portrayed the announcement as a breakthrough that signals both parties are willing to cut deals but there remains little evidence Democrats and Republicans can find agreement on the broader tax and spending issues hanging over the economy.