Obama Urges Congress to Pass Small Business Aid
President Barack Obama
Chip Somodevilla/Getty Images
President Barack Obama answers questions during a news conference in the East Room of the White House.
President Barack Obama answers questions during a news conference in the East Room of the White House. Photographer: Chip Somodevilla/Getty Images
Sept. 10 (Bloomberg) -- Mort Zuckerman, chairman of Boston Properties Inc., talks with Bloomberg's Julie Hyman about the economic performance of the Obama administration. (This is an excerpt of the full interview. Source: Bloomberg)
President Barack Obama challenged congressional Republicans to make middle-class tax cuts permanent before debating whether to keep them for the wealthiest Americans.
Obama said at a White House news conference yesterday that lawmakers should find agreement on initiatives to spur economic growth and hiring, and on extension of Bush-era tax cuts for individuals who make less than $200,000 a year and couples earning less than $250,000.
Keeping the existing top rates as well, which Republicans advocate, is unaffordable and won’t boost the economy, he said.
“We’ve got an area of agreement, which is let’s help families out there who are having a tough time,” Obama said. “Why hold the middle class hostage in order to do something that most economists don’t think makes sense?”
With elections that will decide control of Congress less than two months away, Obama is heading for a confrontation with Republicans, who are seeking to take control of the House and Senate from Democrats by making the November vote a referendum on his stewardship of the world’s largest economy. The biggest fight may be over tax cuts passed under former President George W. Bush and set to expire at the end of the year.
House Republican leader John Boehner of Ohio and Senate Republican leader Mitch McConnell of Kentucky are pushing a compromise that would extend tax cuts for everyone for two years. Boehner also proposes to freeze federal spending at the 2008 level, except for defense, national security and veterans’ programs.
‘Bad Idea’
Obama said extending the tax cuts for the nation’s top earners is a “bad idea” because it would cost $700 billion in government revenue at a time of record budget deficits.
McConnell said he is “disappointed” in Obama’s insistence on letting the top tax rate rise, saying it will hurt small businesses.
“The president spent a lot of time blaming others and talking about more government spending,” McConnell said in a statement. “But Americans want to know that Washington is going to stop the reckless spending and debt, the burdensome red tape and job-killing taxes.”
Under Obama’s plan, the top marginal rate would increase to 39.6 percent from 35 percent currently for top earners.
Obama stopped short of threatening a veto of legislation that would extend all the rates. “Certainly there’s going to be room for discussion,” he said.
Economic Adviser
Obama also announced he is appointing Austan Goolsbee to lead the White House Council of Economic Advisers, replacing Christina Romer. Romer announced last month she was leaving her post to return to teaching at the University of California in Berkeley.
The president said he recognized public frustration with the pace of the recovery.
“Even though the economy is growing again,” Obama said, “the hole the recession left was huge and progress has been painfully slow.”
Obama blamed a “partisan minority” in the Senate for holding up legislation to help small businesses. The bill, which has passed the House, would provide $12 billion in tax breaks and assistance to small businesses and $30 billion to encourage lending.
This week he proposed a package of $180 billion in business tax breaks and infrastructure spending. That would come on top of the $814 billion stimulus measure enacted last year.
Growth and Jobs
The economy expanded at a 1.6 percent annual rate in the second quarter, down from 3.7 percent in January through March, and the unemployment rate was 9.6 percent last month. Only 723,000 people were added to company and government payrolls so far in 2010, or 8.6 percent of the 8.4 million jobs lost during the recession, which is the biggest employment slump in the post-World War II era.
“For all the progress we’ve made, we’re not there yet,” Obama said. “And that means people are angry.”
The non-partisan Cook Political Report in Washington forecasts Republicans will get a net gain of at least 40 seats in the House after November’s elections, giving them a majority. In the Senate, the report says Republicans may gain as many as nine seats, leaving the Senate with a 50-50 party split.
Obama cast the congressional election as a choice between the policies of the last decade that led to the financial crisis and moving forward. On that basis, “then I think Democrats will do very well,” he said.
Middle East
At his eighth solo White House news conference since taking office, Obama also said he has urged Israeli Prime Minister Benjamin Netanyahu to extend a moratorium on construction of West Bank settlements to keep direct talks with the Palestinians moving forward.
“It makes sense to extend that moratorium so long as the talks are moving in a constructive way,” Obama said. At the same time, Palestinian Authority President Mahmoud Abbas must show Israelis that he is “serious and constructive in these talks.”
The moratorium is set to expire Sept. 26. Abbas left the U.S. brokered meeting in Washington last week vowing to break off negotiations unless there is an extension. Netanyahu has said the issue of the settlements should be tackled and resolved during the direct talks not be used as an excuse to abandon negotiations.
To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Hans Nichols in Washington at hnichols2@bloomberg.net
Rate These Stories
Rate this Page