WASHINGTON — President Barack Obama Monday urged Congress to extend for one year Bush-era tax cuts for anyone earning less than $250,000—a plan that reinforces already sharply-drawn battle lines between and Republicans, who want all the cuts to continue.
Obama, speaking at the White House, acknowledged he’s in for a fight.
“What’s holding us back from meeting these challenges, it’s not a lack of plans, it’s a lack of ideas,” the president said. “It is a stalemate in this town, in Washington, between two very different views about which direction we should go in as a country.”
And, Obama noted, “Nowhere is that stalemate more pronounced than on the issue of taxes.”
He insisted the nation has “tried it their way. It didn’t work.” Republicans hotly dispute that notion, noting the economy grew for more than six years after the initial Bush cuts in 2001.
But Obama insisted the public is “with me on this,” and that ending the cuts would be a “big blow to working families.”
The two parties do agree on keeping the cuts for those earning less than $250,000, he said, so “We should be able to come together and get this done.”
Former Massachusetts Gov. Mitt Romney, the presumptive Republican presidential nominee, and congressional Republicans didn’t seem eager to compromise. The Republican-dominated House of Representatives is expected to vote later this month on extending all the cuts by one year. But the Democratic-led Senate is likely to balk.
Romney’s camp Monday was adamant the cuts should continue for everyone.
“President Obama’s response to even more bad economic news is a massive tax increase. It just proves again that the President doesn’t have a clue how to get America working again and help the middle class,” said campaign spokeswoman Andrea Saul.
Romney’s plan is to not only keep the Bush tax rates, but cut them 20 percent across the board. He has not specifically said how he’d pay for the entire plan.
Romney wants reduce federal spending to 20 percent of gross domestic product, down from its current 24 percent.
He says he would work to “slowly raise the retirement age” for future Social Security recipients, as well as slowing the growth in benefits for “higher-income retirees.” On Medicare, Romney said the private sector would “compete to offer insurance coverage at the lowest possible price,” while raising the Medicare eligibility age would increase by a month each year from the current 65.
Romney’s plans would increase the already-huge national debt, according to nonpartisan budget watchdog group U.S. Budget Watch. It estimates his program would increase debt $2.6 trillion through 2021.
It’s not clear which if any party would benefit from their tax cut stance.
At best, “This issue will give the two parties ammunition for their arguments,” said Nathan Gonzales, deputy director of the Rothenberg Political Report, which studies congressional races.