Hatch, R-Utah, isn't a fan of this strategy, instead arguing the tax cuts implemented under President George W. Bush should be extended for one full year, allowing Congress to work on a broad rewriting of the tax code.
"This is a step toward the ultimate goal of comprehensive tax reform that shows that there is a path to resolving the challenges we face as a nation," said Hatch, in a statement released early Wednesday announcing the compromise with Chairman Max Baucus, D-Mont.
The Finance Committee will debate their agreement Thursday morning, but Baucus was already heralding it as a victory.
"This win shows we're able to come together to tackle tough problems," he said. "This is exactly the kind of work it will take to address the fiscal cliff."
Hatch has been far more reticent to talk about bipartisanship, particularly in an election year where he has been campaigning vigorously as a Republican willing to do battle with Democrats.
Still, he has acknowledged that even if Republicans make significant gains in November, it will take some level of compromise to rewrite the tax code.
"This is my last term. I'm ready to bite the bullet," Hatch told the Associated Press in June after claiming his party's nomination in his bid for a seventh term.
The package of business tax breaks, known as the "tax extenders" bill, is quite often a non-controversial piece of legislation, though it gets heavy attention from lobbyists and companies impacted by the individual provisions.
The bill's success has been in doubt this year because of the tough election cycle.
It includes 49 tax provisions including the research and development tax credit and one for renewable energy initiatives, though Baucus and Hatch said they have agreed to let 24 percent of the current tax provisions expire.
The package has a $152 billion price tag.