President Barack Obama told newly elected state governors that he’s “optimistic” the administration will reach a deal on tax cuts with congressional Democrats and Republicans before the end of the year.
“I believe it’s going to get resolved,” Obama told the governors as he met with them in Washington. “That doesn’t mean there’s not going to be some posturing.”
Administration officials and lawmakers are seeking to break a stalemate over extending Bush-era tax cuts before Congress adjourns. The House today passed a Democratic plan to extend the tax cuts on the first $200,000 of an individual’s annual income and the first $250,000 for a married couple filing joint returns. Republicans want to extend the rates for all income levels and say they will block the House measure in the Senate.
The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31.
Obama, who was joined at the meeting by Vice President Joe Biden, told the governors that the U.S. economy is still “not moving as quickly as it needs to be” and he said he wanted to hear about which programs were working in their states to increase American competitiveness.
“We want to be a partner for all of you,” he said.
Governors said after other meetings that included Cabinet secretaries that they welcomed the offers to work together.
“The new governors appreciate very much the administration reaching out the way it has,” Governor-elect Dan Malloy of Connecticut, a Democrat, said afterward.
The ranks of Republican governors grew in the Nov. 2 elections, just as the party won control of the House of Representatives and narrowed the Democratic majority in the Senate.
Obama said that while he’s a “proud Democrat” he wants to work with members of both parties.
“We have just had a very vigorously contested election, but the election’s over,” the president said. “Now I think that it’s time for all of us to make sure that we’re working together.”
Other governors-elect attending the meeting included Democrat Peter Shumlin of Vermont, Independent Lincoln Chafee of Rhode Island, and Republicans Nikki Haley of South Carolina and Sam Brownback of Kansas.
Obama also pressed Congress to approve an extension of unemployment benefits to aid the long-term jobless when state programs run out. He told the governors that a failure by lawmakers to pass the extended benefits would “have a huge impact on your local economies.”
The president’s Council of Economic Advisers released a report today saying the expiration of unemployment benefits would affect almost 7 million unemployed workers, cost as many as 600,000 jobs, and slow economic growth over the next year.
Since December 2007 -- the start of the worst U.S. recession since the Great Depression -- Congress has extended the total amount of aid three times so that the unemployed could receive up to 99 weeks of assistance averaging $300 per week.
Democrats earlier this week offered to extend benefits for a year, with the $56 billion cost financed with borrowed money. Republicans demanded the extension be offset with savings elsewhere in the government’s budget.
Earlier extensions of benefits included billions of dollars in aid for state governments, which Shumlin said the governors now know not to expect in the future because of the federal government’s budget deficit, which was almost $1.3 trillion in fiscal year 2010.
“We’re not getting any even if we ask for it,” he said. “None of the 50 governors are living under the illusion that there will be hundreds of millions of more federal dollars coming our way.”
Obama said Biden and his senior adviser Valerie Jarrett were the main administration contacts for governors, and he told the state leaders not to hesitate to contact the White House if there are ways the administration can help.
“Don’t wait until you’re really mad about something before you call us,” he said. “We’d prefer not to read about it in the press.”
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