Why Obama wants to keep Bush tax cuts for another year
President Obama will call for a one-year extension of Bush-era tax cuts for families earning less than $250,000 a year. Will House Republicans support this extension?
(AP Photo/Carolyn Kaster, File)
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 Jan. 1.
Obama, a Democrat, will make the request in a 11:50 a.m. EST statement at the White House.
Republicans in Congress are unlikely to be swayed, as they have consistently argued that the Bush tax cuts should be extended for everyone, including higher earners.
Obama has pushed what he calls "tax fairness" in his campaign for re-election on Nov. 6, repeatedly urging Congress to make the tax cuts permanent for families making less than $250,000 a year. His Republican challenger, Mitt Romney, has suggested Congress wait to act until January, when he hopes to take office.
The tax cuts enacted by Obama's Republican predecessor, George W. Bush, will expire on Jan. 1 without congressional action, part of a so-called fiscal cliff that could hit the U.S. economy alongside deep automatic spending cuts.
Analysts warn the impact of rising taxes and lower federal spending could tip the economy back into recession.
Robert Gibbs, a senior adviser to Obama's campaign, defended the proposed extension on Monday as a way to help boost middle-income Americans and propel the U.S. economy.
"We have to continue to grow our economy - we need to grow it from the middle class out," he told NBC's "Today" show.
"Millionaires and billionaires - they don't need a tax cut. They're not struggling in this economy. They've done well even as the middle class has shrunk," he added.
The president's proposal comes as lawmakers return from a week-long recess.
The expiring tax cuts set up what could be another deeply partisan fight in Congress, where Republicans hold the majority in the House of Representatives and Obama's fellow Democrats narrowly hold the Senate. It is not clear whether any legislation would pass before the November election or after it.
Representative Tom Price, a member of the House Republican leadership, told "Fox News Sunday" the House would pass legislation in July to preserve the Bush tax cuts for another year, a move he said Romney supports.
Representative Xavier Becerra, a member of the House Democratic leadership, said Democrats would not support any measure that did not address the nation's fiscal challenges on a long-term basis.
"Those are bills to nowhere," Becerra said on "Fox News Sunday," referring to the House Republicans' legislation to extend the Bush tax cuts.