WASHINGTON (Reuters) - House of Representatives Republican leader John Boehner called on Wednesday for a two-year freeze on all current U.S. tax rates, including Bush-era tax cuts for the rich set to expire at the end of this year.
Speaking ahead of an economic address set for later in the day by President Barack Obama, Boehner also proposed that the U.S. government cut spending for next year to 2008 levels -- before federal corporate bailouts and Obama’s $814 billion economic stimulus plan.
Boehner’s call for a freeze on tax rates amounts to a compromise with Obama in advance of November 2 congressional elections, which are expected to result in big Republican gains in the Democratic-controlled House and Senate.
Obama favors extending former President George W. Bush’s tax cuts for the middle class, but allowing those for the wealthy -- people earning more than $250,000 a year -- to expire at the end of the year. Obama says the nation cannot afford to extend tax breaks for the rich.
Some Republicans have called for a permanent extension of the tax cuts, saying they are needed to spur economic growth. To cut some of them could dampen economic growth, they say.
Boehner made his pitch for the two-year freeze on all rates in an appearance on ABC’s “Good Morning America,” just hours before Obama was to speak in the lawmaker’s home state of Ohio.
“If we’re able to do this together, I think we’ll show the American people that we understand what’s going on in the country and we’ll be able to get our economy moving again and get jobs growing in America,” Boehner said.
Reporting by Tom Ferraro and David Alexander; Editing by Will Dunham