Congress will approve tax hikes on private-equity firm managers, real-estate funds and similar investment outfits within the coming weeks, says White House budget director Peter Orszag.

“I believe that there will be some legislative changes in carried interest, although the exact parameters are still being negotiated,” Orszag said at a Reuters conference in New York, according to various reports.

“But I think you’re going to see a change in the taxation of carried interest pass the Senate within the next few weeks,” he said.

Carried interest is the profit share paid to general partners of investment firms, typically 20 percent of a fund’s gains above a set amount.

Such profits are currently taxed at 15 percent of the capital gains rate, although lawmakers including House Ways and Means Committee Chairman Sander Levin want to more than double the rate by taxing it as ordinary income.

Levin, a Michigan Democrat, previously proposed legislation to classify carried interest as ordinary income, subject to a top rate of 35 percent. That idea has been approved by the House three times in recent years and died each time in the Senate.

Levin’s efforts are gaining momentum in Congress this month as a way to pay for a jobs bill, Bloomberg reported.

Many investors in private-equity firms have come to expect a minimum annual return of 20 percent on their money, The New York Times has reported. To cope with the higher taxes, these firms might have to lower their investors’ expectations, which might be possible given the current low yields available from fixed-income investments, the Times reported.

Senate Democratic leaders are being pushed to approve the carried-interest tax increase by President Barack Obama’s administration, which has twice sought the higher taxes in budget requests.

Senator Charles Schumer, D.-N.Y., has said the chamber was considering adopting the House plan. Any jobs measure containing the provision would likely require 60 votes to pass the Senate. An earlier version of the jobs bill that didn’t contain the tax increase on fund managers passed the Senate in March, with four Republicans joining the entire Democratic caucus in favor.

Those opposed to the move agree that its passage is likely.

“I think it's very much up for grabs right now that something will happen on carried interest this year, and there's a better than even chance that it will not be favorable [for the private-equity industry],” says Doug Lowenstein, head of the Private Equity Council, the industry's largest lobbying group, according to Financial News.

He added that the outcome still remains “somewhat in doubt, and of course there's always a chance that nothing will be done.”

For Orszag, the carried interest proposal will create revenue for the government, adding there is no “credible evidence” the tax would have a “significant adverse effect” on work efforts, choice of work location or risk-taking.

The adverse effects he mentioned would be the possibility that some investment firms might leave the United States, would not try as hard to make money or would forgo some risk-taking, the Times reported.