President Barack Obama said it would be “irresponsible” for Congress to extend tax cuts for the wealthiest Americans and voiced support for Treasury Secretary Tim 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 November 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 extension of Bush-era tax cuts for individuals who make less than $200,000 a year and couples earning less than $250,000.
In the town hall style meeting, Obama defended his administration’s handling of the economic crisis, saying that he had made hard, and sometimes unpopular, choices that were necessary to save rescue the economy.
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.”
He suggested that his administration is open to new approaches and urged the Tea Party movement to offer concrete ideas about reforming 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,” he said.
On taxes, he 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 and Senate Republican leader Mitch McConnell of Kentucky are pushing a compromise that would extend tax cuts for everyone for two years. Boehner also proposes to freeze federal spending at the 2008 level, except for defense, national security and veterans’ programs.
Obama said that assuming that Boehner will become speaker is “premature.”
He also criticized the Republican’s 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.
© Copyright 2014 Bloomberg News. All rights reserved.