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Obama asks to extend tax cuts
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President Barack Obama prodded Republicans in Congress to extend the Bush-era tax cuts for people making less than $250,000 a year in the face of lagging economic numbers and GOP determination to preserve the lower rates for all taxpayers.
In his White House remarks Monday, Mr. Obama cast himself as a defender of the middle class, continuing a theme he had emphasized last week while campaigning in Ohio and Pittsburgh. But the upbeat message of that bus tour had to compete with last Friday's jobs report, which found the unemployment rate mired at 8.2 percent.
Citing the persistently high jobless numbers, congressional Republicans offered predictable opposition to the proposal while, from a very different perspective, a prominent liberal critic of the administration said such initiatives were unlikely to gain any political traction in the absence of more positive news on the unemployment front.
"The job numbers overwhelm everything else," said Robert Reich, who was labor secretary in the Clinton administration. "They offer the best and clearest indicator to average people of how the economy is doing and where it is headed."
Monday's call from the president echoed his previous position on the future of the Bush-era tax rates just as the Republicans' response renewed their defense of lower rates for more affluent taxpayers.
In a transcript of a radio interview Monday, distributed by his campaign, Republican candidate Mitt Romney said of the Obama plan, "That will be another kick in the gut to the middle class of America," arguing that it would hobble "job creators."
"How will these small-business tax hikes create jobs?" House Speaker John Boehner, R-Ohio, demanded in a statement issued by his office. "Even Democratic congressional leaders and [former] President [Bill] Clinton have turned their back on this proposal"
The statement referred to the calls from some congressional Democrats to extend the tax cuts to incomes as high as $1 million and Mr. Clinton's recent statement endorsing at least a temporary across-the-board extension, a move that would preserve the compromise that the Obama administration forged with congressional Republicans in 2010.
Mr. Obama anticipated such criticisms in his statement, making the case that tax cuts for the wealthy do not have the same stimulative effect on the economy as lower taxes for middle-income taxpayers who are more likely to spend rather than save the extra income. He noted that his administration had cut taxes for small businesses 18 times, and contended that 97 percent of small business would not see higher rates under his plan. In his regular briefing later Monday, press secretary Jay Carney said the president would veto legislation that exempted wealthier taxpayers from higher rates.
Mr. Obama argued that since he and the House majority agreed on the need to extend the rates for most taxpayers, they should move on that front and resolve their dispute on higher earners after the politically clarifying impact of the November election. At that point, he said, lawmakers and the administration could address the disagreement on rates in the context of a broader overhaul of the nation's tax structure.
"Let's agree to do what we agree on," the president said.
After that, Mr. Obama said, attempting to shape the terms of debate for the election, "we can continue to have a debate about whether it's a good idea to also extend the tax cuts for the wealthiest Americans. I'll have one position. The other side will have another. And we'll have that debate, and the American people can listen to that debate."
Assessing the political impact of the move, Mr. Reich said, "Tax proposals may be attractive or unattractive depending on your point of view, [but] the public has grown quite cynical about the willingness of Congress to pass anything. The jobs numbers are real, tangible, and don't depend on any guesswork on what Congress might do."
If the monthly jobs reports between now and the election show a pattern of improvement, Mr. Reich said, voters, particularly independents, might be more receptive to individual policy proposals, but, he added, "If between now and the election the numbers are unrelentingly bad, if unemployment stays where it is ... the public is not going to want to hear any excuses."
Mr. Reich argued further that the administration would be better advised, substantively as well as politically, to attract public support with larger, more ambitious policy initiatives.
"It's still important for Obama, notwithstanding everything just said with regard to public cynicism and the jobs numbers, to come forward with some proposals that are bold enough and large enough to get the public's attention," he said. "So far the scale of the proposals is not up to the scale of the crisis."
While Republicans contend that Mr. Obama's call for higher rates is an effort to fuel government they see as too large, the president said the country simply cannot afford to forgo the added revenue in a year of record deficits. The Obama proposal would raise rates for higher earners from 35 percent to 39.6 percent.
In a statement, Andrea Saul, a Romney spokeswoman, tried to subvert Mr. Obama's claim to be a champion of the middle class. His administration, she said, "doesn't have a clue how to get America working again and help the middle class."
The exchanges came as the Romney campaign was trumpeting another month of fundraising success relative to the incumbent's campaign. The Republican campaign announced that it had raised $106 million in June, well ahead of the $71 million raised by the president and his party allies.
First Published July 10, 2012 12:00 am
