President Barack Obama will call on Monday for a one-year extension of Bush-era tax cuts for families earning less than $250,000 a year, according to a White House official, seeking to spare the economy the impact of taxes going up on January 1.
Obama, a Democrat, will make the request in a statement at the White House, said the official, who spoke on condition of anonymity. Republicans in Congress, however, are unlikely to be swayed, as they have consistently argued that the Bush tax cuts should be extended for everyone, reports Reuters.
Historically low tax rates first enacted under Republican former President George W. Bush in 2001 and 2003 expire at the end of the year if Congress fails to act. Also to expire are jobless benefits for the long-term unemployed and a temporary payroll tax cut.
In addition, $1.2 trillion in across-the-board reductions in spending on federal programs would begin to phase in as a result of Congress' failure late last year to reach a deal to cut the budget deficit, says Toledo Blade.
Also on CNN, Robert Gibbs, a longtime adviser to President Barack Obama, said: "Let's make some progress on our spending by doing away with tax cuts for people who quite frankly don't need them - tax cuts that haven't worked." Mr. Obama, he said, was "100% committed" to that position.
Republicans want tax cuts to be extended for all Americans, saying it is a matter of fairness. President Obama, on the other hand, has called for extending the Bush tax cuts only for middle-class Americans, exposing households making more than $250,000 a year to higher taxes. Mr. Obama appears to be sticking to his guns, in spite of pressure to give in because of the still anemic U.S. economy, according to Wall Street Journal (blog).
Setting up a debate likely to take place after the November elections, Mitch McConnell, R-Ky., the top Republican in the Senate, had a different take: He said on the same program that the Bush-era tax rates should be extended.
"What we ought to be doing is extend the current tax rates for another year with a hard requirement to get through comprehensive tax reform one more time," McConnell said, pointing to a sluggish economy as reason not to raise taxes. But Gibbs said now is the right time to allow the tax cuts to expire, informs CBS News.