Tue, Sep 14, 2010 - Page 7 News List

Comments signal break in US tax logjam

AP, WASHINGTON

House Minority Leader John Boehner said he would vote for US President Barack Obama’s plan to extend tax cuts only for middle-class earners, not the wealthy, if that were the only option available to House Republicans.

Boehner said it was “bad policy” to exclude the highest-earning Americans from tax relief during the recession, but he said he wouldn’t block the breaks for middle-income individuals and families if Democrats wouldn’t support the full package.

Income tax cuts passed under former US president George W. Bush will expire at the end of this year unless Congress acts and Obama signs the bill. Obama said he would support continuing the lower tax rates for couples earning up to US$250,000 or single taxpayers making up to US$200,000, but he and the Democratic leadership in Congress refuse to back continued lower rates for the fewer than 3 percent of Americans who make more than that.

The cost of extending the tax cuts for everyone for the next 10 years would approach US$4 trillion, according to congressional estimates. Eliminating the breaks for the top earners would reduce that bill by about US$700 billion.

Boehner’s comments signaled a possible break in the logjam that has prevented passage of a tax bill, although Republicans would still force Democrats to vote on their bigger tax-cut package in the final weeks before the November congressional elections.

“I want to do something for all Americans who pay taxes,” Boehner said in an interview taped on Saturday for Face the Nation on CBS. “If the only option I have is to vote for some of those tax reductions, I’ll vote for it ... If that’s what we can get done, but I think that’s bad policy. I don’t think that’s going to help our economy.”

White House press secretary Robert Gibbs issued a statement on Sunday saying: “We welcome John Boehner’s change in position and support for the middle-class tax cuts, but time will tell if his actions will be anything but continued support for the failed policies that got us into this mess.”

Austan Goolsbee, new chairman of the White House Council of Economic Advisers, said on ABC’s This Week that he hopes Democratic lawmakers who also want an across-the-board extension will join Obama and others in the party in supporting legislation aimed at the middle class before the November elections.

In response to Boehner’s comments, Goolsbee said: “If he’s for that, I would be happy.”

With congressional elections less than two months away, both parties have been working to score points with voters generally unhappy with Congress. Democrats are bearing the brunt of voter anger over a stubborn recession, a weak job market and a high-spending government, giving the Republicans an opening for taking back control of the House and possibly the Senate.

Democratic leaders would relish putting up a bill that extends only the middle-class tax cuts and then daring Republicans to oppose it. In response, Republican lawmakers probably would try to force votes on amendments to extend all the tax cuts, arguing that it would be a boost to the economy and then point to those who rejected them.

A compromise over the tax-cut extensions had been suggested by some senior Democrats. In a speech last week in Cleveland, Obama rejected the idea of temporarily extending all the tax cuts for one to two years.

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