U.S. President Barack Obama called on Congress Monday to pass a one-year extension of the Bush- era tax cuts for Americans earning less than 250,000 U.S. dollars a year, renewing tax debate and drawing battle lines with the Republicans.
“We need policies that grow and strengthen the middle class, policies that help to create jobs, that make education and training more affordable, that encourage businesses to start up and create jobs right here in the United States,” Obama made the statement at the White House, surrounded by people who would benefit from the extension.
“That’s why I believe it’s time to let the tax cuts for the wealthiest Americans, folks like myself, to expire,” he said, seeking to eliminate the lower rates for the upper-income earners.
His proposal put him at odds with Republicans who have long insisted that the Bush-era tax cuts should be extended for everyone, including the top earners.
“Let’s not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy,” Obama told the Republicans in Congress. “We can have that debate, but let’s not hold up working on the thing that we already agree on.”
The tax cuts, initially enacted by George W. Bush government, are set to expire at the end of the year without Congress action.
Economists worry that the tax hikes, combined with automatic spending cuts of the federal government scheduled early next year, would hit the shaky economic recovery and tip the country into recession.
Obama said that in just a few years the United States went from record surpluses under Bill Clinton to record deficits and the prosperity didn’t trickle down from the wealthy to the middle- class families.
In an effort to portray himself as middle-class champion, Obama noted the tax cuts extension would benefit 98 percent of Americans and wealthy Americans should pay more to deal with the country’s debt problem.
Expiring tax cuts would intensify partisan fight in the election year. The House Republicans are expected to vote this month to extend the Bush tax cuts for everyone, including those with annual income of more than 250,000 dollars.