Obama and Republicans Fight over Bush Tax Cuts Extension
The New York Times reports that President Barack Obama is calling for a one-year extension of the Bush tax cuts for those making less than $250,000. This is in contrast to what the Republicans led by presidential candidate Mick Romney want. House Republicans want to extend all Bush tax cuts. House minority leader Nancy Pelosi and Senate Finance Committee member Charles E. Schumer are proposing to make a$1 million cutoff as a compromise with Republicans. White House officials said President Obama’s move is intended to ease anxiety over the combination of tax increases and spending cuts that will kick in at the end of the year. Gene B. Sperling, director of the White House’s National Economic Council, defends the $250,000 ceiling. He says, “Economically, extending tax cuts to those workers will have the most effect on them and the strongest impact on the economy.”
With a torpid job market and a fragile economy threatening his re-election chances, President Obama is changing the subject to tax fairness, calling for a one-year extension of the Bush-era tax cuts for people making less than $250,000.
House Republicans plan to vote this month to extend for a year all of the Bush tax cuts, for middle- and upper-income people.
The president’s proposal could also put him at odds with Democratic leaders like Representative Nancy Pelosi of California and Senator Charles E. Schumer of New York, who have advocated extending the cuts for everyone who earns up to $1 million.
Above that level, Mr. Schumer has said, people are not likely to spend the savings from lower taxes and help the economy.
They said it would ease anxiety over the “fiscal cliff” — the combination of tax increases and automatic spending cuts that are scheduled to kick in at the end of this year. That one-two punch, economists say, could deal a heavy blow to an already tender economy unless the White House and Congress work out some kind of compromise.
Proposing a one-year extension, a senior official said, recognizes that Mr. Obama and the Republicans are not likely to resolve the larger debate over whether to extend the Bush tax cuts for everyone or, as Mr. Obama has long advocated, just for the middle class. That debate is likely to be decided at the ballot box, where a victory by Mr. Romney would almost certainly enshrine all the tax cuts.
“To the degree that there is concern about the economy, we’re saying, ‘Let’s extend the middle class tax cuts for a year,’ ” said Gene B. Sperling, director of the White House’s National Economic Council. “Economically, extending tax cuts to those workers will have the most effect on them and the strongest impact on the economy.”
Representative Tom Price, Republican of Georgia, said Mr. Romney supported preserving all of the Bush-era cuts for another year because he believes “that will stimulate the economy and provide certainty out there in the job market.” …
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