Obama Demands Tax Cut Extensions For Middle-Class Families
"The American people are with me on this," Obama said, asking Congress to let cuts for wealthier Americans expire while giving the other 98 percent a leg up. "Poll after poll shows this."
Established by his Republican predecessor, former President George W. Bush, the expiration of the tax cuts comes as part of an expected "fiscal cliff" due Jan. 1.
Experts, including Federal Reserve Chairman Ben Bernanke, warn that the so-called cliff could be devastating for Americans on top of steep spending cuts.
According to Reuters, the decision has some additional benefits for the incumbent's candidacy.
Whether it gains traction or not, Obama's move achieves several political goals. It shifts the campaign conversation - at least for a day - from last week's meager jobs report and his handling of the economy to "tax fairness" and inequality in America.
It burnishes Obama's message of being the candidate who backs the middle class while Republicans and their presumptive presidential nominee, Mitt Romney, favor the wealthy.
It also sets a baseline for what is likely to be a months-long debate about deficit reduction.
Opponent Mitt Romney has already said such a move on Obama's part could result in a "massive tax increase" for families and small businesses.
"Let's not hold the vast majority of Americans and our economy hostage while we debate the merits of another tax cut for the wealthy," Obama said in response to critics. "We can have that debate, but let's not hold up working on the thing we already agree on."
According to Danny Yadron, live-blogging for the Wall Street Journal, "The president is attempting to turn the tables on congressional Republicans, who want to extend the Bush tax cuts for all Americans. Mr. Obama is accusing them of preventing extending tax cuts for lower earners to protect tax cuts for the wealthy.
Obama addressed Congress during his speech, telling them if they approve the tax cut, "I will sign it tomorrow. Pass it next week, I'll sign it next week. Pass it next—aw, you get the idea."
Watch the president's speech for yourself below.
From the WSJ live-blog:
Obama’s tax speech, for all the fanfare, is not making new proposals. While highlighting the difference between his stance and the Republicans he is marketing anew the tax proposals he has been making for some time.
From the February Obama budget (p. 4): “In the Budget, I reiterate my opposition to permanently extending the Bush tax cuts for families making more than $250,000 a year and my opposition to a more generous estate tax than we had in 2009 benefiting only the very largest estates. These policies were unfair and unaffordable when they were passed, and they remain so today. I will push for their expiration in the coming year.”
... and on page 39: "Not extending the middle-class tax cuts would have hurt our nascent economic recovery, and would have imposed an enormous burden on working families."
It may not be a new message, but as Yadron explained in summarizing the impact of the speech:
...he did attempt to further his populist campaign message that he is the presidential candidate looking out for the working voter. He said he wanted his tax code to resemble that of former President Bill Clinton, another president known for trying to woo the middle class, and acknowledged he himself doesn't like paying taxes.
It’s an attempt to draw a contrast with Mitt Romney, who has had a harder time convincing regular voters he can relate to them, according to public opinion polls. That fact was also on display last week when Mr. Romney was asked what voters should make of his family vacation at a private residence in New Hampshire. Mr. Romney replied that he wants to enact policies so every voter can take a vacation.
More analysis is expected on the president's demand. As WSJ points out, this is the first time he's called for a one-year extension for the lower-earning group, "which would help him create more short-term certainty in an uncertain economic climate."
"It's the right fiscal policy," former budget aide for the House and Senate Stan Collender told Talking Points Memo. “The last thing you want to do right now is make it any less likely that consumers will spend, and those earning less than $250k per year are far more likely to spend than those earning about $250k.”