Obama's Plan To Extend Middle-Class Tax Cuts Gains Support

President Obama’s plan to extend tax cuts only for middle-class earners, not the wealthy, receives support from House Minority Leader John Boehner, saying he would vote for if that were the only option available to House Republicans.

Boehner, R-Ohio, said it is “bad policy” to exclude the highest-earning Americans from tax relief during the recession, and later Sunday he accused the White House of “class warfare.” But he said he wouldn’t block the breaks for middle-income individuals and families if Democrats won’t support the full package.

Income tax cuts passed under President George W. Bush will expire at the end of this year unless Congress acts and Obama signs the bill. Obama said he would support continuing the lower tax rates for couples earning up to $250,000 or single taxpayers making up to $200,000. But he and the Democratic leadership in Congress refused to back continued lower rates for the fewer than 3 percent of Americans who make more than that.

The cost of extending the tax cuts for everyone for the next 10 years would approach $4 trillion, according to congressional estimates. Eliminating the breaks for the top earners would reduce that bill by about $700 billion.

Boehner’s comments signaled a possible break in the logjam that has prevented passage of a tax bill, although Republicans would still force Democrats to vote on their bigger tax-cut package in the final weeks before the November congressional elections.

“I want to do something for all Americans who pay taxes,” Boehner said in an interview taped Saturday for “Face the Nation” on CBS. “If the only option I have is to vote for some of those tax reductions, I’ll vote for it. … If that’s what we can get done, but I think that’s bad policy. I don’t think that’s going to help our economy.”

White House press secretary Robert Gibbs issued a statement Sunday saying, “We welcome John Boehner’s change in position and support for the middle class tax cuts, but time will tell if his actions will be anything but continued support for the failed policies that got us into this mess.”

Boehner responded to that press release with one of his own. “Instead of resorting to tired old class warfare rhetoric, pitting one working American against another, the president and the Democratic leadership should start working with us this week to ensure a fair and open debate to pass legislation to cut spending and freeze tax rates without any further delay,” he said.

Austan Goolsbee, new chairman of the White House Council of Economic Advisers, said on ABC’s “This Week” that he hopes that Democratic lawmakers who also want an across-the-board extension will join Obama and others in the party in supporting legislation aimed at the middle class before the November elections.

In response to Boehner’s initial comments, Goolsbee said, “If he’s for that, I would be happy.”

With congressional elections less than two months away, both parties have been working to score points with voters generally unhappy with Congress. Democrats are bearing the brunt of voter anger over a stubborn recession, a weak job market and a high-spending government, giving the GOP an opening for taking back control of the House and possibly the Senate.

Democratic leaders would relish putting up a bill that extends only the middle-class tax cuts and then daring Republicans to oppose it. In response, GOP lawmakers probably would try to force votes on amendments to extend all the tax cuts, arguing that it would be a boost to the economy, and then point to those who rejected them.

A compromise over the tax-cut extensions had been suggested by some senior Democrats. In a speech last week in Cleveland, Obama rejected the idea of temporarily extending all the tax cuts for one to two years.

The tax-cut argument between Obama and Republican lawmakers focuses on whether the debt-ridden country can afford to continue Bush’s tax breaks, which were designed to expire next year. Republicans contend that cutting back on government spending ought to be the focus of efforts aimed at beginning to balance the federal budget.

If Republicans regain control of the House, they would remove Democrat Nancy Pelosi of California as speaker, a position that is second in line to the presidency after the vice president. Boehner would be the most likely successor, and he already is the focus of criticism from the Democrats’ re-election campaign.

Obama himself has been leading the charge against Boehner, traveling last week to the Republican minority leader’s home state to accuse him of offering little but stale ideas that led to the economic meltdown.

In keeping with that tactic, the Democratic National Committee said Sunday it plans to begin airing an ad Tuesday in Washington and on national cable that portrays Boehner as a supporter of tax cuts for the wealthy and a foe of spending for teachers, police officers and firefighters.

“Boehner has a different plan,” the ad states. “Tax cuts for businesses and those that shift jobs and profits overseas. Saving multinational corporations 10 billion.”

At a White House news conference Friday, Obama described the Republican proposal for a tax extension for the highest of earners as an effort “to give an average of $100,000 to millionaires.” Instead, he said, both parties should move forward on their areas of agreement.

—

Associated Press writers Jim Kuhnhenn and Stephen Ohlemacher contributed to this report.