House Republican Leader John Boehner today challenged President Obama's proposal to let the Bush tax cuts expire for wealthy Americans, saying the president's latest plan for economic revival won't have much impact.
Mr. Obama today will argue for extending the Bush-era tax cuts, save for those that hit individuals making $200,000 a year or households earning $250,000. Boehner, by contrast, said today the tax cuts should be extended for everyone for two years. He said extending the tax cuts for all would give more confidence to small businesses that are unsure of whether they will be hit with a tax increase.
"I think the president is missing the bigger point here," Boehner said this morning on ABC's "Good Morning America." "You can't have a strong economy if you're raising taxes on the very people you expect to invest in our economy to begin hiring people again."
Mr. Obama will lay out his arguments today in a speech in Cleveland, Ohio. Given the current national deficits, he is expected to say, it would be fiscally irresponsible to extend the tax cuts for the wealthiest Americans. All of the tax cuts, enacted in 2001 and 2003, will expire at the end of this year if Congress does not act.
Additionally, Mr. Obama today will lay out a proposal for $180 billion worth of tax breaks and spending to boost the economy, paid for by closing tax breaks for corporations. The main elements of the plan include permanently enacting a research and development tax credit and allowing businesses to write off new equipment purchases through 2011. It will also include investing $50 billion in new infrastructure spending.
Boehner said today he is "open to the president's ideas." Indeed, proposals like extending the R&D tax credit are typically billed as conservative ideas. Yet Boehner said that more spending and targeted tax increases create uncertainty for small businesses.
"Until this uncertainty and spending's under control, I don think these are going to have much impact," he said of the president's plans.David Axelrod: End GOP Tax Cuts for Millionaires
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Other Republicans have also had a cool response to the president's ideas. Sen. Charles Grassley (R-Iowa) called the plan a "nonstarter" because of the tax breaks that would be closed in order to pay for it, the New York Times reports. Similarly, Rep. Dave Camp of Michigan, the top Republican on the House Ways and Means Committee, reportedly called Obama's proposals worthy of consideration, but he said that "raising taxes to cut taxes is at best a zero sum game."
While Boehner said today he would prefer to see all of the Bush tax cuts extended, he did not directly say when asked whether he would support letting them all expire after two years in order to reduce the deficit.
While the Bush tax cuts are responsible for a major portion of the national deficit, Boehner said, "We can't deal with the deficit until we're willing to get our arms around spending and have a strong economy."
In addition to extending all of the Bush tax cuts for two years, Boehner this morning called for passing a bill to bring government spending back to 2008 spending levels, which he said "would save about $100 billion this year alone."
Meanwhile, White House Senior Advisor David Axelrod told "Early Show" anchor Erica Hill this morning that in spite of the costs, "We have to continue and make permanent the middle class tax cuts."