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Obama seeks tax-cut extension for middle class
Would exclude those who make more than $250,000
Question of the Day
In an attempt to change the subject from the dismal jobs market and cast GOP rival Mitt Romney as a champion of the rich, President Obama on Monday issued a new call for Congress to extend the Bush tax cuts for the middle class and allow rates to rise on wealthier income earners.
The president, in an address from the White House, called for a one-year extension of tax cuts for households making less than $250,000 a year.
Mr. Romney and Republicans in Congress would like to extend all the Bush tax cuts, set to expire at the end of the year for the middle class as well as higher earners, before they tackle a comprehensive overhaul of the tax code early next year.
“We should not raise taxes on the middle class and small businesses at a time when the recovery is still fragile,” Mr. Obama said, appearing in the East Room with families and workers who would benefit from the continued tax breaks. “That’s why I’m calling on Congress to extend the tax cuts for the 98 percent of Americans who make less than $250,000 for another year.”
If Congress doesn’t extend the tax cuts, he said, millions of American families could see their taxes go up by $2,200 a year. “It would be a big blow to working families, and it would be a drag on our entire economy,” he said.
The White House is trying to force the GOP’s hand or face the consequences of appearing as if they are supporting the wealthy over middle-class Americans struggling in a bad economy. The HouseGOP is planning a vote later this month on a bill that would extend all of the Bush tax cuts, lay out details of their principles for tax reform and include expedited procedures for the consideration of a tax-code overhaul in 2013.
“While I disagree on extending tax cuts for the wealthy because we just can’t afford them, we all say that we should extend tax cuts for 98 percent of the American people,” Mr. Obama said. “Let’s agree to do what we agree on, right?”
The Bush tax cuts — approved during the first term of George W. Bush and extended by Mr. Obama and Congress in 2010 — are due to expire at the end of the year. Economists worry that the tax cuts, combined with the automatic across-the-board spending cuts set to take place unless Congress finds offsets, would amount to a one-two punch to the already shaky U.S. economy.
The president’s renewed push follows Friday’s jobless numbers showing unemployment stagnant at 8.2 percent — a disappointing report that rattled the Obama campaign and gave Mr. Romney an opening to argue that he offers an alternative road map for the economy.
Outside observers view Mr. Obama’s Monday statement from the White House as a transparent attempt to change the subject from Friday’s sobering jobs report.
David Rohde, a professor of political science at Duke University, said presidents have a limited ability to affect the public’s thoughts on what issues are important, but Mr. Obama is doing what he can.
“Obama cannot make people forget that the economy is not recovering as quickly as they want, but he may be able to get them to think that other issues are also important,” he said. “Tax fairness is one of those additional issues. It is also an issue that can help him to motivate the Democratic base.”
The Romney campaign countered the president’s middle-class tax-extension photo op by pointing out that Mr. Obama’s proposal amounts to a “massive tax increase” and said it just proves that the president “doesn’t have a clue how to get America working again and help the middle class.”
“The president’s latest bad idea is to raise taxes on families, job creators and small business,” said Romney spokeswoman Andrea Saul. “Unlike President Obama, Gov. Romney understands that the last thing we need to do in this economy is to raise taxes on anyone.”
Congressional Republicans also argued that the president’s approach would harm small-business owners.
“President Obama is still asleep at the switch when it comes to our economy and jobs,” said House Speaker John A. Boehner, Ohio Republican. “In the wake of another weak jobs report, the president is doubling down on his quixotic call for the same small-business tax hikes that have been routinely rejected by the House and Senate.”
But Mr. Obama argued that 97 percent of small businesses, as well as 98 percent of the public, would fall under the $250,000 marker. White House spokesman Jay Carney later said the 3 percent of small businesses that would be subject to the new tax are made up of lawyers, lobbyists and hedge-fund managers who call themselves small businesses when they file articles of incorporation.
After Mr. Carney’s remarks, the GOP-controlled House Small Business Committee circulated quotes from several small-business owners lamenting the impact the tax increases would have on them.
Cliff Laverty, who owns Total Radio Inc., a wireless Motorola dealer in Tulsa, Okla., said his company would fall into the $250,000-and-above category because the company is organized as a Chapter S small-business corporation and the business profits pass through to the owners’ personal income.
“President Obama’s proposal is going to negatively impact our ability to reinvest and grow our business,” Mr. Laverty said.
More generally, Republicans argue that Mr. Obama’s push for increasing taxes for the wealthy defies earlier assertions he made on the subject. The Republican National Committee pointed to Mr. Obama’s comments in August 2009 when asked about raising taxes.
“The last thing you want to do is raise taxes in the middle of a recession,” Mr. Obama told NBC at the time.
Mr. Obama”s use of his bully pulpit to push for middle-class tax cuts coincides with Democrats’ new, multipronged attack on Mr. Romney’s personal finances, including calls to explain his offshore bank accounts and release additional tax returns.
As the Obama campaign has stepped up attacks on Mr. Romney’s personal fortune, estimated at $250 million or more, Team Romney has pushed back.
Last week, when asked whether he should be vacationing at his lakeside house in New Hampshire while other Americans are struggling, Mr. Romney said all Americans deserve a vacation and, if elected, he would work to get the economy moving again so that all Americans could enjoy one.
Over the weekend, Mr. Romney held a $50,000-per-person fundraiser Sunday in the Hamptons, New York’s enclave of wealthy waterfront homes on Long Island’s South Shore. On Monday morning, Romney aides reported that the campaign and the Republican National Committee raised a combined $106 million in June, their biggest one-month fundraising draw of the election so far.
Mr. Obama and the Democratic National Committee have yet to announce their fundraising numbers for June.
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About the Author
Susan Crabtree is an award-winning investigative reporter with more than 15 years of reporting experience in Washington, D.C. Her reporting about bribery, corruption and conflict-of-interest issues on Capitol Hill has led to several FBI and ethics investigations, as well as consequences for members within their caucuses and at the ballot box. Susan can be reached at firstname.lastname@example.org.
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