NEW YORK (CNNMoney.com) – The political jousting over whether to include both temporary AMT relief and an extension of reduced dividend and capital gains rates in a final tax reconciliation bill may come to an end by Friday.

Greg Valliere, chief strategist of the Stanford Washington Research Group, said he thinks there's a better than 50 percent chance that a deal will be struck this week. "I think we're very close. ... The White House has put tremendous pressure on the Hill to do something."

Senate Majority Leader Bill Frist (R-Tenn.) said Wednesday that he would push for a vote to occur this week before lawmakers take a two-week recess, according to the publication CongressDaily.

Still, no final deal has been reached and there are still stumbling blocks that need to be overcome. The rancorous debate over just what should be included in the bill has been waged – without much compromise -- for months.

The House-passed version of the tax reconciliation bill excludes AMT relief (which the body passed under a separate bill), but it includes a two-year extension of the reduced investment tax rates, which expire in 2008. Those cuts would extend the 15 percent rate on long-term capital gains and dividends. For low-income taxpayers, that rate would be 5 percent.

The Senate-passed version of the tax reconciliation bill, meanwhile, does the opposite: it excludes an extension for investment tax cuts and includes temporary AMT relief for tax year 2006.

In a speech on Tuesday, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said that he didn't think there would be enough votes to pass a final bill if it didn't include a one-year "patch" for the alternative minimum tax, which while originally intended for the wealthy now threatens to ensnare tens of millions of middle class taxpayers unless increases in the AMT income exemption levels are approved.

The AMT, which disallows many of the deductions allowed under the regular tax code, imposes a higher bill on taxpayers than the regular tax code.

CongressDaily cited sources who said – and Valliere said he'd heard the same thing -- that House Ways and Means Committee Chairman Bill Thomas (R-Calif.) indicated to Grassley on Tuesday evening that he might agree to include AMT relief in the final reconciliation package, although it was not clear what he would get in return for such a concession.

Frist, Thomas and Grassley favor extending the investment tax cuts, but Grassley could not secure enough votes to include them in the Senate bill because of opposition from Senator Olympia Snowe (R-Me.), who sits on the Finance Committee.

Democrats, meanwhile, have been unanimous in opposing the investment tax cuts, arguing that they are a boon to the wealthy and would come at a time when the budget includes cuts for programs that benefit low-income Americans. But they are also under pressure to insure AMT relief is passed, in part because many come from high-tax states where residents are disproportionately affected by the AMT.

To meet what's known as the "Byrd rule," the cost of the tax reconciliation package may not exceed $70 billion. Including both AMT relief and investment tax cuts would push the bill beyond that limit unless other measures are taken to curb the cost or add revenue raisers.

One possibility being discussed is the removal from the bill of business tax relief extenders, which would then be included under separate legislation, Valliere said.

Another is to allow all taxpayers, not just those with modified adjusted gross income of $100,000 or less, to convert their traditional IRAs to Roth IRAs after 2010, he said.

Even if conferees do come to a final agreement as to what should be included in the final conference report this week, both the House and the Senate would have to vote on the measure separately. And since each chamber has different rules for doing so – the Senate, for example, allows for longer debate -- getting the bill to pass through both chambers in the next 48 hours might be difficult.

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