White House reiterates Obama open to compromise on tax

WASHINGTON Thu Nov 11, 2010 4:53pm EST

President Barack Obama holds a Veterans Day event at U.S. Army Garrison at Yongsan military base in Seoul, November 11, 2010. REUTERS/Jason Reed

President Barack Obama holds a Veterans Day event at U.S. Army Garrison at Yongsan military base in Seoul, November 11, 2010.

Credit: Reuters/Jason Reed

WASHINGTON (Reuters) - The White House sent more signals on Thursday of the potential for a tax cut compromise with newly emboldened Republicans, who want to extend the cuts for wealthier Americans as well as the middle class.

"The president has been clear that extending tax cuts for middle-class families is his top priority and he is open to compromise to get that done," said White House spokesman Bill Burton.

"He has also expressed concern about the cost of making the highest income tax cuts permanent and is looking forward to discussing this and other issues with bipartisan congressional leaders next week," Burton said.

The Bush-era tax cuts, which are due to expire at the end of the year, are expected to be a top priority next week when President Barack Obama sits down with Democratic and Republican congressional leaders.

Obama's Democrats will continue to control Congress through the end of the year. If there is no deal on tax cuts by then, the new Congress, which will feature a House of Representatives with a Republican majority after a strong showing in November 2 elections, could take up the issue again in January.

Republicans also reduced the Democratic majority in the Senate in this month's elections.

Obama and Democrats want to extend the tax cuts only to families making less than $250,000 a year while Republicans want them extended to all Americans.

Obama has insisted tax cuts for wealthier Americans should not become permanent because of a potential $700 billion impact on the deficit over the next decade. He has left the door open to a temporary extension for higher income levels.

Republican John Boehner, who is in line to become House speaker, has proposed extending the upper-class tax cuts for two years and saving money by rolling back domestic government spending -- excluding entitlement programs -- to 2008 levels.

Obama senior adviser David Axelrod told The Huffington Post there are concerns Congress will continue passing temporary extensions for the wealthy "but I don't want to trade away security for the middle class in order to make that point."

Axelrod, asked about the article, said by e-mail that the Huffington Post's conclusion that Obama was ready to accept an across-the-board temporary continuation of the tax cuts was overwritten.

He said the article contained "no news" and that he had said nothing that had not already been said by Obama.

But Axelrod and others made clear there is the possibility of a compromise -- although the president would strongly oppose an effort to make tax cuts permanent for wealthier Americans.

Senate Republican leader Mitch McConnell said he is willing to listen to what the president has in mind.

"While the president and some of his allies in Congress have a strange desire to raise taxes on hundreds of thousands of small businesses across the country, we would welcome the president's help to extend all the current tax rates so that no one sees a tax hike," he said.

(Reporting by Jeff Mason and Steve Holland; Editing by Bill Trott)

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Comments (3)
ginchinchili wrote:
My hope is that Obama does not capitulate on this issue. The tax cuts for the Middle Class make sense, but tax cuts for the rich will only succeed in raising the deficit. You can’t be for lowering the deficit AND extending tax cuts for the rich, that is if you’re being intellectually honest. It can only be one or the other.

We know that the tax cuts for America’s wealthiest are not creating jobs, that is unless you were born yesterday. Obama and the Democrats recently passed legislation to lower taxes for small businesses and to give small businesses access to much needed loans. This, of course, was opposed by the Republicans.

If the Republicans are going to insist on keeping all the tax cuts then the best way to do that would be to give all of the tax cuts to the Middle Class. That money will end up going to the top 2% anyway, but will give Middle Class Americans more money to spend. But to allow the rich to keep those tax cuts is economic foolery. It would serve no useful purpose and would kill efforts to lower the deficit.

Common sense MUST trump politics on this issue. It’s particularly scandalous considering the cuts Republicans want to make that affect the poor and Middle Class. Hurt those in need so that the rich can get richer? I don’t think so. And if you think that’s the way to go, don’t claim to be a Christian and don’t utter the blasphemous words, God bless America, because God doesn’t. Not anymore.

Nov 11, 2010 5:01pm EST  --  Report as abuse
Trooth wrote:
@ginchinchili

I would go a step further and let all tax cuts expire. It was supposed to be to help with the ensuing economic difficulties after 9/11. It served its purpose to help push a stagnating economy back several years for us to deal with then. Now we are buried in the economy that the Fed and Clinton and Bush and both Democrat and Republican Congresses has been pushing back further and further.

Time to get the deficit under control. Bring our military home, including from Germany and other peacful areas. Time to let our “friends” sink or swim. Time to cut all the aid we send to our enemies and “friends” alike. We still export food all over the world.

Let’s stop demonizing those who make a good income, and quit rewarding the unproductive with handouts and give them incentives to become productive. If any taxes need cut it is the US Corporate tax. Second highest (soon to be the highest) in the world. Quit giving breaks to countries, and lower it across the board and make those who are paying none start paying their fair share of a lowered rate. Maybe then we can get some companies back.

Nov 11, 2010 7:03pm EST  --  Report as abuse
Dave1968 wrote:
I agree let the tax cuts expire already, Obama’s so wishy washy like clinton kissing republicans tax cutting rear ends.

Nov 16, 2010 9:08am EST  --  Report as abuse
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