President Barack Obama will support a one-year extension of the Bush tax cuts, but only on income of less than $250,000 a year.†The President will make the request formal in a statement Monday at the White House.
Obama has been in favor of ending tax cuts for the wealthy throughout his administration, but accepted a two-year extension of the cuts in 2010, in exchange for an extension of unemployment benefits and temporary payroll tax cuts, and the end of a Senate filibuster blocking the repeal of “Don’t Ask, Don’t Tell.”
That extension expires at the end of 2012, and Obama surrogate and former White House Press Secretary Robert Gibbs says that Obama is “100 percent committed” to ending the cuts for the rich.
In a Friday campaign stop in Ohio, Obama argued that richer Americans need to pay their “fair share.”
“We have got to make sure that those of us who can afford to do a little bit more – because we have been so blessed by this country – that the wealthiest among us can pay a little bit more to help close this deficit,” said Obama, according to CNN.
Republicans in Congress were cool to the President’s proposal. Minority Leader Mitch McConnell, R-Ky., said that his caucus supports an across-the-board one-year extension of the cuts.
“This is the same president who signed the very same thing two years ago with the argument to do otherwise would make the economy worse,” McConnell told CNN.
That is not, in fact, what Obama said. In 2010, in a statement regarding the tax cut extension, Obama told reporters, “Republicans believe that we should also make permanent the tax cuts for the wealthiest 2 percent of Americans.† I completely disagree with this.† A permanent extension of these tax cuts would cost us $700 billion at a time when we need to start focusing on bringing down our deficit.”
Obama made clear that he was agreeing to the short-term extension as a “compromise,” and that he opposed it.
The short-term fate of the tax extension is bleak. Republicans appear unlikely to pass a measure that will only extend cuts for the middle class, and Democrats appear unlikely to agree to any measure that would extend cuts for the wealthy. With an election in November, it’s likely that both parties will wait for the lame-duck session to make any decisions on the future of the cuts.
The proposal has a more immediate effect on the election itself. Obama is using the tax cut issue to draw a distinction between himself and Republican challenger Mitt Romney. Obama has hit Romney for being too allied with the interests of the wealthy, rather than the middle class.
The Romney campaign predictably attacked the proposal. Campaign spokesperson Andrea Saul said, “The presidentís latest bad idea is to raise taxes on families, job creators and small businesses.”
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