Possible tax deal would give big wins to both parties

Renewing those business tax breaks now would mean he wouldn't have to include them in next year's sweeping overhaul, freeing up money Republicans could instead use to help push income tax rates lower.

Obama and Democrats were trying to make permanent tax credits of up to $1,000 per child that go to many lower- and middle-income families; tax credits up to $2,500 for college students; and earned income tax credits for low-income married couples and families with three or more children.

Republicans want to make permanent the ability of people in states without an income tax to deduct local sales taxes on their federal returns; tax breaks businesses get for research and development costs and for buying new equipment; and some levies on companies doing business overseas.

The White House, against the will of some congressional Democrats, was resisting Republican attempts to pare taxes on medical devices and costly health insurance policies, which were enacted under Obama's 2010 health care law to help pay for that overhaul.

Agreement was close on the numbers, but flash points included GOP efforts to weaken Obama attempts to reduce air and water pollution and loosen travel restrictions to Cuba, and to ease laws regulating the financial industry.