McConnell: I Could Work With Obama on Tax Cuts

Senate Minority Leader Mitch McConnell, R-Ky., said on "Face the Nation" Sunday that he would be willing to work with President Barack Obama on getting an extension "of some kind" to the Bush tax cuts for those earning $250,000 and above.

Days after the Republican Party regained the House majority, President Obama told "60 Minutes" correspondent Steve Kroft that there is now "a basis for a conversation" over extending the Bush tax cuts.

"Hopefully we can agree on a set of facts that leads to a compromise," Mr. Obama told Kroft. The interview will air at 7 p.m. ET/PT on CBS.

"I do sense some flexibility on the President's part, and we're happy to talk to him about it," McConnell said.

He is in favor of permanently extending the tax cuts for all income levels.

Though McConnell suggested a willingness to talk, this morning Rep. Eric Cantor, R-Va., made it clear that he opposes any compromise over the tax cuts. "First and foremost, we're not going to be willing to work with him on the expansive liberal agenda he's been about," Cantor said.

When host Bob Schieffer said that Mr. Obama's comments appear to suggest a willingness to compromise over the issue of extending the tax cuts for the wealthiest Americans (the president has previously said he could not justify what it would cost taxpayers to implement), McConnell said, "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."

By talking about the taxes to be paid by those earning above a quarter-million per year, McConnell said, the "so-called upper-income thing diverts people away from the following fact . . . you raise taxes on 750,000 of our most productive small businesses, which represents 50% of small business income and 25% of the work force, at a time when job creation is just bumping along.

"We really think that's a bad idea," he said.

[In an August 2010 article titled "Five Myths About the Bush Tax Cuts," the Washington Post reported that "Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets."]

"I have to ask you, Senator McConnell, when you're talking about extending those tax cuts for upper-income Americans, the estimates are that will cost $700 billion over the next ten years," Schieffer said. "If you take all the tax cuts together you're talking about $4 trillion dollars. How do you intend to pay for those tax cuts?"

"Bob, it only costs $700 billion if you consider it the government's money," McConnell replied. "This is our money. This has been the tax rate for almost a decade."

McConnell said the problem was that government wasn't taxing enough to cover the costs of its services, but that it was spending too much.

"The whole nomenclature surrounding this that somehow we're doing people a favor by giving them their own money back, I just don't accept," McConnell said. "The government is too big. It needs to be strong. We can do that by targeting the annual discretionary spending which we, by the way, have already begun to do in this Congress. We're going to be able to do more of it, in the next Congress. And then I'm hoping that the President's deficit reduction commission which is supposed to report on December 1st, is going to have some recommendations with regard to our long-term debt problems - which are quite severe - that people like me and my Republican colleagues can support."

Obama Talks Tax Cuts Extention

"60 Minutes" Preview: Obama on Tax Cuts
Obama to GOP: Keep Tax Cuts to Middle-Class
Is a Tax Cut Compromise in the Works?