President Obama used his first press conference in months to draw a sharp line with congressional Republicans on economic policy and the fate of expiring tax cuts passed under predecessor President George W. Bush.
Mr. Obama said he remained strongly opposed to extending tax cuts for wealthy taxpayers when they expire at the end of the year, saying only individuals earning under $250,000 should be given tax relief.
Republicans have pushed for all the tax cuts to be extended — at least temporarily — and a number of moderate Democrats have broken with Mr. Obama on the issue. GOP leaders say that raising taxes would be the wrong policy as the economy continues to struggle and unemployment is just under 10 percent.
But the president said the political standoff risked saddling middle-class taxpayers with a higher tax burden next year, and urged Republicans to compromise.
"Why hold the middle class hostage in order to do something most economists think doesn't make sense?" Mr. Obama told reporters.
On another issue, Mr. Obama confirmed that he spoke with Harvard law professor Elizabeth Warren about heading the new consumer finance watchdog agency created under Mr. Obama's financial regulatory overhaul. The outspoken Mrs. Warren was a prime advocate for the new agency, but her candidacy to head the agency faces an uncertain reception in the Senate.
He also pressed for congressional action on a new $50 billion infrastructure package designed to provide more jobs and economic activity, but he refused to accept a reporter's label that the package amounted to more economic "stimulus." Republicans have hammed the president's signature $814 billion stimulus package approved early in 2009, and polls say that many voters think the plan has not delivered the payoff in new jobs that Mr. Obama and fellow Democrats had promised.
Mr. Obama did say that all his economic programs were designed to "stimulate" an economy that he repeatedly said had been mismanaged by Mr. Bush and the Republicans.
"Isn't that what I am supposed to be doing?" Mr. Obama said. "I will keep trying to stimulate growth and jobs in the country as long as I am president of the United States."
On another topic, Mr. Obama praised Mr. Bush for his outreach to Muslims in the wake of the September 11 attacks, and said some of the tension in U.S. relations with the Muslim world reflected difficult economic times.
"We must not turn on each other," he said.
Asked if he thought his administration had helped elevate the profile of an obscure Florida pastor whose threat to burn a stack of Korans on Sept. 11 has sparked international outrage, Mr. Obama said he was considering the danger the Koran-burning could pose for U.S. troops in Afghanistan and other Muslim nations.
"We can't play games here," he said.
Mr. Obama has spoken out against the Koran-burning and Defense Secretary Robert Gates called Pastor Terry Jones this week to ask him not to follow through with his threat.
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