U.S. senators of both parties say a compromise on federal taxes is likely to preserve lower rates for all income levels and allow for consideration of other measures, such as extending federal benefits for the unemployed. The comments come one day after Senate Republicans successfully blocked consideration of two Democratic proposals that would have allowed tax cuts to continue for all but the wealthiest Americans.

The tax debate comes at a time of sluggish U.S. economic growth and large federal budget deficits. At issue: should broad tax cuts enacted during the Bush administration continue for all income levels, or only for the middle class?

Republican Senator John Kyl of Arizona opposes any tax hikes. "Especially in an economic downturn, like we are in now, it is not a good idea to raise people's taxes. They key here is to put people back to work, to get economic growth going again. We are never going to get out of the deficit we have, unless we have economic growth," he said.

Kyl spoke on the CBS program Face The Nation.

Also appearing on the program was Democratic Senator Richard Durbin of Illinois, who accused Republicans of preventing congressional action on extending jobless benefits while demanding tax breaks for millionaires.

"The notion that we would give tax cuts to those making over $1 million a year, which is the Republican position, and then turn our backs on two-million Americans who will lose unemployment benefits before Christmas, is unconscionable," he said.

Republicans have pledged to use procedural motions to block Senate consideration of all legislation so long as the tax issue remains unresolved. President Barack Obama has urged members of both parties to negotiate a compromise on taxes and other matters. Without action, all Bush-era tax cuts on all income levels will expire at the end of the year.

Appearing on NBC's Meet The Press program, the Senate's top Republican, Mitch McConnell, sounded optimistic that a bipartisan deal will be struck. "I think the American people expect us to work together to make sure their taxes do not go up. And we are working on that package, and I think we are going to get there," he said.

McConnell would not discuss details of a possible compromise, but negotiations are widely reported to be focusing on preserving all tax cuts for another year or two and an extension of unemployment benefits.

Senator Durbin says he will oppose any deal that falls short of that basic framework. "I am not voting for any permanent tax cut for people at the highest income categories," he said.

Budget experts say, in the long run, significant sacrifice from all Americans will be required to eliminate the nation's trillion-dollar federal deficit. Most economists believe some combination of spending cuts and tax increases is needed.

A presidential deficit commission has issued recommendations that would put the deficit on a downward trajectory during the coming decade, but many of the provisions are thought to be politically unpalatable.

Republican lawmakers have won another round in the political battle over how to kick-start the struggling U.S. economy.

The Republican minority in the Senate blocked a measure that would have extended current tax breaks to middle class Americans but not to the country's wealthiest citizens. Republicans effectively killed the proposal in a procedural vote.

Republicans argue extending tax cuts for everyone, including the wealthiest, is necessary to create jobs and spark consumer spending.

The legislation, backed by Senate Democrats, would have kept tax breaks in place for individuals making less than $200,000 a year or for couples arning less than $250,000 a year.

A second measure - to extend the tax cuts for Americans making less than $1 million a year - also failed.

The tax cuts - first enacted during the presidency of George W. Bush - expire at the end of the month.

White House officials and a select group of lawmakers have been meeting over the past several days in an attempt to forge a compromise.

Earlier Saturday, U.S. Vice President Joe Biden used the president's weekly address to urge Congress to extend tax breaks to the middle class.

The vice president, filling in for President Barack Obama while Mr. Obama returned from Afghanistan, also called on lawmakers to approve an extension of unemployment benefits to millions of Americans before they leave for the upcoming holiday break.

In the Republican address, Senator Mark Kirk of Illinois called for bipartisan solutions to cut federal spending.

Senator Kirk said the American people want Washington to tax, spend and borrow less.

U.S. President Barack Obama is calling on lawmakers to help him boost the economy with a new trade deal and compromises on tax cuts.

Speaking Saturday to promote a new trade deal with South Korea, Mr. Obama called for speedy ratification of the pact in Congress.

He said the deal reached Friday after three years of stalemate could increase annual exports of American goods by up to $11 billion and create tens of thousands of jobs.

"I look forward to working with Congress and leaders in both parties to approve this pact because if there is one thing Democrats and Republicans should be able to agree on it should be creating jobs and opportunities for our people," he said.

But Mr. Obama expressed disappointment Republicans in the Senate blocked measures Saturday to make tax cuts passed by former president George W. Bush permanent for the middle class.

"Those provisions should have passed," said the president. "I continue to believe that it makes no sense to hold tax cuts for the middle class hostage to permanent tax cuts for the wealthiest two percent of Americans, especially when those high income tax cuts would cost an additional $700 billion that we do not have and would add to our deficit. But with so much at stake, today's votes cannot be the end of the discussion."

Republican lawmakers who voted against the initiative by Mr. Obama's Democratic Party want to make tax cuts permanent for all Americans, including the wealthiest. Republicans say this would help create jobs.

In the Republican weekly address, Illinois Senator Mark Kirk said the president and lawmakers should listen to voters who in November gave Republicans huge gains for the new Congress starting next year.

"These leaders should not raise taxes and risk another recession. Instead, Congress should reduce spending and prevent another tax hike on American taxpayers. Americans already pay some of the highest taxes in the world," he said.

If no compromise is found, current tax rates would expire for all Americans at the end of the year.

White House officials and a select group of lawmakers have been meeting over the past several days in an attempt to forge a compromise. Discussion points now include temporarily extending income tax rates, as well as extending jobless aid for the long-term unemployed, which are also starting to run out.

The struggling economy, including unemployment hovering near 10 percent, has recently been the main focus for the outgoing Democratic Party-dominated Congress, which will be replaced by a Republican majority House of Representatives and slim Democratic majority Senate in 2011.