Obama Proposes One-Year Extension of Bush Tax Cuts for Middle-Income Families
President Obama announced on Monday his plans to extend what have become known as the "Bush era tax cuts" for one year for families earning less than $250,000 per year.
For over a year President Obama has come under intense scrutiny for the country's poor economic numbers. Last Friday's jobs report showing that unemployment in June held steady at 8.2 percent did little to bolster the claim that his administration is getting the economy back on track.
"Everybody agrees we've got to do something about these deficits and these debts," Obama said in a press conference in the White House East Room on Monday.
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The announcement comes just days before the Republican controlled House of Representatives plans to vote on a permanent extension. However, the Senate, which is controlled by the Democrats, is not expected to follow suit.
Speaking for Republicans in the upper chamber, Senate Minority Leader Mitch McConnell (Ky.), instead called for a one-year extension of all the Bush tax cuts on the condition that Congress would rewrite the entire tax code.
"In the Obama economy, we need policies that are designed to create jobs, not designed to project his," McConnell told reporters, saying the announcement was simply an election year ploy.
The issue of how and to whom the tax cuts should apply is the issue that Democrats and Republicans will grapple over through November.
Mitt Romney, the soon-to-be GOP nominee, proposes extending the lower tax rates for all families, saying that keeping tax high on high-wage earners would not benefit the economy. Obama disagrees, and says that extending tax cuts to the wealthiest Americans would be "least likely to promote growth."
"President Obama's response to even more bad economic news is a massive tax increase," said Romney spokesperson Andrea Saul in a statement on Monday. "It just proves again that the president doesn't have a clue how to get America working again and help the middle class."
However, if Obama agreed to an extension of the tax cuts for all families, it would not be the first time. In December of 2010 he signed off on an extension that included even the wealthiest taxpayers but has now reversed course, saying the only bill he will sign now is one that applies to families making under the $250,000 threshold.
Economists are concerned that if the tax cuts are not extended in some fashion and a plan to reduce spending is not agreed upon by Congress and the White House soon, then any hope for a quick economic recovery would diminish.
Penny Nance, CEO of Concerned Women for America, also feels that President Obama is merely using the tax cut issue as a way to divide Americans along income lines.
"President Obama knew this was good policy when he extended the full Bush-era tax rates in the past," Nance said in a written statement. "But now that it is election year, the president hopes that no one realizes these 'Bush Tax Cuts' have been the law of the land for more than a decade now."
"For a president who is so adamant on catering to his base and fueling class-tax warfare for election time, his economic team knows the Bush cuts in their entirety are good for Americans."
In a new poll released on July 5 by Pulse Opinion Research, 56 percent of voters believe that President Obama has made the country worse.
