President Barack Obama put the national spotlight back on tax cuts that are due to expire at the end of the year with a renewed call for extending the breaks for middle-class Americans.
Mr. Obama has repeatedly called for Congress to renew the Bush-era tax cuts for individuals earning less than $200,000 and couples making less than $250,000 while letting them expire for millionaires and billionaires. Other personal and business taxes and credits due to expire at the end of the year combined with automatic spending cuts could hurt the recovery, economists say.
Senate Minority Leader Mitch McConnel, R-Ky., appeared to derail the presidents proposal with a call to extend current tax rates with a hard requirement to get through comprehensive tax reform one more time, although a broad reform of tax laws has made little headway in Congress as well. Republicans argue that preserving the Bush-era cuts is necessary to foster business investment and growth to stimulate the economy.
House Republicans are more intent on pursuing unsuccessful attempts to repeal or curb the national health care law with another one-house repeal vote scheduled for Wednesday.
The president might find his plan not only at odds with Republicans but with some leading congressional Democrats as well. Sen. Charles E. Schumer, D-N.Y., and Rep. Nancy Pelosi, D-Calif., the former House speaker, have proposed extending the cuts for everyone making up to $1 million.
However, despite compromises on highway funding and student loans, the bipartisanship is not expected on tax cuts, which will leave it up to a lame-duck Congress to address after the elections.