* Republicans push to continue all Bush tax cuts
* Bill Clinton comment stokes tax debate
* Gene Sperling says "grand compromise" must include taxes
By Caren Bohan and Thomas Ferraro
SAN FRANCISCO/WASHINGTON, June 6 President
Barack Obama's Democrats traded shots with Republicans on
Wednesday about how best to avoid a year-end "fiscal cliff," as
the administration insisted on the need to let tax cuts for
wealthier Americans expire as scheduled on Jan. 1.
The prospect of higher taxes and automatic spending cuts
that kick in next year have spurred calls for Obama to
temporarily extend all of the Bush-era tax breaks to coax
Republicans into a sweeping debt deal, but the White House stood
"President Obama has been clear about his position and it
has not changed," White House press secretary Jay Carney told
reporters traveling with Obama to California. "We should not
extend and he will not extend the ... Bush-era tax cuts for the
wealthiest two percent of the American people."
A top Obama aide separately said the administration was open
to a sweeping deal to tackle the debt, if it was "balanced" to
include tax revenues as well as spending cuts.
"There is no reason that we as a country should not be able
to come together on a balanced grand compromise," White House
National Economic Council director Gene Sperling said in
prepared remarks to the Economic Club of New York.
Leading Democrats in Congress chimed in to back Obama.
"We agree with the administration that Republicans should
not risk a tax hike on the middle class on Jan. 1 by insisting
that millionaires and billionaires get a tax break too," said
Brian Fallon, a Senate Democratic leadership spokesman.
But Republicans, vying to oust Obama from the White House in
the Nov. 6 election, stepped up their calls for a quick
extension of across-the-board income tax cuts first enacted
under former President George W. Bush, a Republican.
Fanning the debate, former Democratic President Bill Clinton
told CNBC on Tuesday that "I don't have any problem with
extending all of it now," although he argued making the cuts
permanent for the rich would be an error.
His spokesman, Matt McKenna, subsequently said that Clinton
did not support extending tax cuts for rich Americans.
Republicans in the House of Representatives plan to hold a
vote on extending the Bush tax cuts this summer, possibly before
Congress heads out for a month-long recess in August.
House Ways and Means Committee Chairman David Camp told
Reuters that Republicans plan to link the vote to the broader
issue of a major overhaul of U.S. tax laws and include a
mechanism that would force Congress to act quickly next year.
Tepid U.S. job creation in May and a festering European debt
crisis have fanned concern about the strength of the U.S.
recovery ahead of a so-called "fiscal cliff" on Jan. 1, which
some economists say will sharply reduce economic growth.
Income tax cuts signed into law by Bush expire at the end of
this year. And in January, deep automatic government spending
cuts start kicking in, unless Congress either agrees to a
sweeping deal to curb the U.S. deficit before that deadline or
passes legislation specifically stopping the scheduled spending
Analysts and some politicians argue that threat should spur
action by lawmakers, but there has been little sign of a
willingness for a deal before the Nov. 6 elections.
Obama has consistently argued that taxes on households
making over $250,000 a year should be allowed to rise to the
pre-Bush level of 39.6 percent, from 35 percent at the moment.
House Democratic leader Nancy Pelosi, however, has opened
the door to increasing taxes starting at the $1 million annual
Obama says he will not agree to further spending cuts
without steps to increase tax revenues, which Republicans
Larry Summers, a former U.S. treasury secretary under
Clinton and former top economic aide to Obama, said on MSNBC on
Wednesday that "we've got to make sure we don't take the
gasoline out of the economy at the end of this year."
Summers did not say the tax cuts for the richest Americans
should be extended, but Republicans, as they pushed to preserve
lower tax rates for everyone, seized on his remark as evidence
of a split between Obama and the two Democratic heavyweights.
"It's pretty obvious that the economy needs the certainty of
the extension of the current tax rates for at least a year,"
said Mitch McConnell, the top Republican in the U.S. Senate.
"That would also give us the time to begin to grapple with
something we all agree we need to do on a bipartisan basis,
which is to reform the whole tax code," McConnell said.