Obama Says It Would Be `Irresponsible' to Extend Tax Cuts for Wealthiest
U.S. President Barack Obama
Joshua Roberts/Bloomberg
U.S. President Barack Obama.
U.S. President Barack Obama. Photographer: Joshua Roberts/Bloomberg
President Barack Obama said it would be “irresponsible” for Congress to extend tax cuts for the wealthiest Americans and voiced support for Treasury Secretary Timothy Geithner and National Economic Council Chairman Lawrence Summers.
“I can’t give tax cuts to the top 2 percent of Americans” and “lower the deficit at the same time,” the president said during an hour-long town-hall discussion on jobs and the economy on CNBC television from the Newseum in Washington.
To give “tax relief primarily to millionaires and billionaires” would be “ an irresponsible thing for us to do,” Obama said. “Those folks are least likely to spend it.”
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 Nov. 2 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 that are set to expire at the end of the year.
Obama is challenging congressional Republicans to make only middle-class tax cuts permanent. He wants lawmakers to find agreement on initiatives to spur economic growth and hiring, and on extending Bush-era tax cuts for individuals who make less than $200,000 a year and couples earning less than $250,000, about 97 percent of taxpayers, according to Internal Revenue Service figures.
Hard Choices
In the town-hall-style meeting, Obama defended his administration’s handling of the economic crisis, saying he had made hard, and sometimes unpopular, choices that were necessary to rescue the economy. Asked if he was vilifying business, Obama responded: “Absolutely not.”
“Let’s look at the track record here,” he said. When he was inaugurated, “the economy was on the verge of collapse.”
“Those same businesses now are profitable. The financial markets are stabilized. We haven’t increased taxes on businesses,” he said.
Geithner and Summers “have done an outstanding job, as has my whole economic team,” Obama said. He declined to say whether they would serve for the remainder of his presidency.
“I have not made any determinations about personnel,” he said. “They have been at it for two years. They are going to have a range of decisions about families that will factor into this as well.”
Tea Party
He suggested that his administration is open to new approaches and urged the Tea Party movement, which advocates for limited government spending, to offer concrete ideas about revamping entitlement programs.
“We’re constantly thinking, is what we’re doing working as well as it could or do we have other options or other alternatives,” Obama said.
On taxes, Obama said taxation levels are at historic lows.
“Our tax rates are lower now than they were under Ronald Reagan,” he said. “The federal government is probably less intrusive now than it was 30 years ago.”
House Republican leader John Boehner of Ohio has proposed extending tax cuts for everyone for two years, a proposal that’s acceptable to Senate Republican leader Mitch McConnell of Kentucky, according to McConnell spokesman Don Stewart. Boehner also proposed freezing federal spending at the 2008 level, except for defense, national security and veterans’ programs.
Obama said assuming that Boehner will become speaker after the November elections is “premature.”
He also criticized the Republicans’ plan to extend the tax cuts for the nation’s top earners because it would cost $700 billion in government revenue at a time of record budget deficits.
Under Obama’s plan, the top marginal rate would increase to 39.6 percent from 35 percent currently for top earners.
To contact the reporters on this story: Kate Andersen Brower in Washington at kandersen7@bloomberg.net; Hans Nichols in Washington at hnichols2@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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