The Hill reported on Saturday, “Days after Democrats received a self-described ‘shellacking’ at the polls, President Obama called for an end to campaigning and an embrace of compromise. But he signaled no willingness to bend on the first challenge likely to face him from a Republican House as he advocated the permanent extension of Bush-era tax cuts for families making less than $250,000 a year despite the GOP’s resolve to extend the tax cuts for all income brackets.”
Obama said in his weekly address, “[A]t a time when we are going to ask folks across the board to make such difficult sacrifices, I don’t see how we can afford to borrow an additional $700 billion from other countries to make all the Bush tax cuts permanent, even for the wealthiest 2 percent of Americans. We’d be digging ourselves into an even deeper fiscal hole and passing the burden on to our children.”
But this is the wrong way to look at it, as New Jersey Governor Chris Christie explained to NBC’s David Gregory on Meet the Press yesterday: “This is about maintaining the current tax structure in a time we have a very weak economy. And so I favor extending these for another two years, extending the current tax system and not having a tax increase. . . . what I’m saying is you should keep the current tax structure in place until our economy gets stronger.”
Appearing on CBS’ Face the Nation, Senate Republican Leader Mitch McConnell said, “This has been the tax rate for almost a decade, almost a decade. The federal government doesn’t have this problem because it taxes too little. It’s got it because it spends too much. We don’t have a revenue problem. We have a spending problem. So the whole nomenclature surrounding this that somehow we’re doing people a favor by giving them their– their own money back, I just don’t accept.”
Sen. McConnell elaborated, “Let me make sure everybody understands what we’re talking about here: These aren’t tax cuts, these are tax increases—tax increases in the middle of a recession.” He emphasized, “We don’t think raising taxes on small business is a good idea. And you can’t do what [the President is] suggesting you might do without having a small business tax increase. . . . [O]ur view is don’t raise taxes on small business. We would rather not do it at any time—in fact I’ve introduced the only bill that would make the current tax rates permanent—but certainly you wouldn’t want to do it in the middle of an income slowdown.”
Indeed, many Democrats in Congress share the view that no one should face a tax increase next year. Senators Joe Lieberman (ID-CT), Ben Nelson (D-NE), Jim Webb (D-VA), and Evan Bayh (D-IN) have all indicated they believe that now is not the time to raise taxes. Back in September, 31House Democrats signed a letter to Speaker Nancy Pelosi (D-CA) saying that the current tax policies should be extended and raising taxes now “could negatively impact economic growth.”
There is bipartisan agreement that now is the wrong time to raise taxes, and Republicans are calling for the current income tax rates to be extended so that no Americans face a massive tax increase in January. If President Obama is really interested in working with Republicans, he has an opportunity during the lame-duck session to support the Republican proposal to prevent taxes from going up on anyone next year.
Senate News Briefing