President Barack Obama Monday called on Congress to extend a series of middle class tax cuts originally enacted under his predecessor.
Obama, speaking at the White House as Congress returns from its July Fourth holiday recess, argued that extending the Bush-era tax cuts for the middle class would be an important step toward reinvigorating a flagging U.S. economy.
The president has frequently called for the tax cuts to be extended since taking office but has run into opposition from Congressional Republicans, who have balked at extending those tax cuts without also extending similar cuts for higher income Americans.
Obama has opposed extending the tax cuts for those making more than $250,000 per year since taking office, though he agreed to a temporary extension of all of the Bush-era tax cuts rather than see taxes on the middle class rise if they expired.
In calling for the extension, Obama took direct aim at the principal GOP rationale for extending all of the tax cuts.
"Many members of the other party believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth," Obama said. "I disagree. I think they're wrong."
He added, "I believe our prosperity has always come from an economy that's built on a strong and growing middle class -- one that can afford to buy the products that our businesses sell; a middle class that can own homes, and send their kids to college, and save enough to retire on."
Obama claimed that the experience of the last 10 years has proved that the Republican philosophy and assertions of tax cuts for the wealthy fueling economic growth have been proven false.
"We were told that it would lead to more jobs and higher incomes for everybody, and that prosperity would start at the top but then trickle down," Obama said. "And what happened? The wealthy got wealthier, but most Americans struggled. Instead of creating more jobs, we had the slowest job growth in half a century."
He added, "We don't need more top-down economics. We've tried that theory. We've seen what happens. We can't afford to go back to it."
Obama warned that without Congressional action, the tax cuts for all Americans are due to expire at the end of the year, which he said would be a "big blow" to working families while also putting a further drag on the economy.
He also warned Republicans not to again refuse to extend the middle class tax cuts if the entire package is not extended.
"I believe we should be able to come together and get this done. While I disagree on extending tax cuts for the wealthy, because we just can't afford them, I recognize that not everybody agrees with me on this," he said. "On the other hand, we all say we agree that we should extend the tax cuts for 98 percent of the American people."
He added, "Let's agree to do what we agree on. Right? … [But] 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."
However, initial reactions from Republicans showed little sign of accepting Obama's call, with a number of leading Senators immediately denouncing Obama's plan as aimed at raising taxes on small businesses.
Senate Minority Leader Mitch McConnell, R-Ky., said that Obama's proposal was motivated by politics rather than economic considerations.
"No one should see an income tax hike next year—not families, not small businesses and other job creators," McConnell said. "We should extend all the tax rates while we make progress on fundamental tax reform."
He added, "We should be focused on the pro-growth jobs legislation that the House has passed, while ensuring that Washington does no additional harm to an all-too-fragile economy."
The campaign of Republican presidential candidate Mitt Romney was also quick to attack Obama's proposal.
"President Obama's response to even more bad economic news is a massive tax increase," said Andrea Saul, Romney Campaign Spokesperson. "It just proves again that the President doesn't have a clue how to get America working again and help the middle class."
She added, "Unlike President Obama, Governor Romney understands that the last thing we need to do in this economy is raise taxes on anyone. He has a plan to permanently lower marginal rates, help middle-class Americans save and invest, and jumpstart economic growth and job creation."
by RTT Staff Writer
For comments and feedback: email@example.com