Taking aim at trickle down fiscal policies and warning legislators not to hold the American economy “hostage,” President Barack Obama demanded today that Congress extend Bush-era middle class tax cuts for a year.
Addressing the nation from the White House’s East Room, Obama implored Congress to “do the right thing” and immediately pass extension legislation, which he would instantly ink.
“I will sign it tomorrow,” he said.
In a politically risky move, Obama also recognized that the economy has been disappointing under his watch, but used that to bolster his argument for the extension.
“We’ve tried it their way. It didn’t work,” he said.
“At the beginning of the last decade, Congress passed trillions in tax cuts that benefited the wealthiest Americans…What happened? The wealthy got wealthier, but most Americans struggled. Instead of creating more jobs, we had the slowest job growth” in the last half century, he said.
Obama reiterated his belief that America’s financial health is dependent upon the country’s middle class and small businesses, both of which would stand to benefit from the extension.
If Obama’s proposal does not get the OK from the House and Senate, many Americans will see a bigger tax bill come Jan. 1, when the cuts expire.
Obama said the increase would average some $2200.
Economists generally worry that additional taxes could exacerbate the country’s already weak economic recovery, as tax rate uncertainty tends to deter consumer spending.
There’s some thought that the extension, though popular and perhaps necessary, might not get legislative approval before the election.
Obama has long clashed with Congressional Republicans on this issue.
They want to extend the tax cuts for all income groups — including the extremely wealthy.
He’s also conflicted with his own political party: Top Dems want tax cut extensions to apply to all households earning $1 million and under.
Obama, recognizing that his calls to end tax cuts to the wealthy are unpopular with Republicans, nevertheless asked Congress to approve the extension while both parties negotiate that point.
“We can have that debate, but let’s not hold up on that thing we can already agree on,” he said.
Follow Victoria Bekiempis @vicbekiempis.