WASHINGTON — President Obama opposes any compromise that would extend the Bush-era tax cuts beyond this year, The New York Times reported late Tuesday, citing unnamed sources. The position, which will be made clear in a speech Wednesday, will boost liberal Democrats while alienating conservatives facing rising GOP popularity in a tough election year.
To the chagrin of the White House, Obama’s recently departed budget director, Peter R. Orszag, took the exact opposite stance on Tuesday in a column in The New York Times.
By proposing to extend the rates for the 98 percent of households with income below $250,000 for couples and $200,000 for individuals — and insisting that federal income tax rates in 2011 go back to their pre-2001 levels for income above those cutoffs — Obama intends to cast the issue as a choice between supporting the middle class or giving breaks to the wealthy, the Times reported.
In what is being billed a highly partisan speech planned for Wednesday, Obama will also make a case for the package of roughly $180 billion in expanded business tax cuts and infrastructure spending. He’s planning to offset these costs by closing other tax breaks for multinational corporations, oil and gas companies and others.
But several economists interviewed by the Times questioned why Obama was not keeping the Bush tax cuts and even going further with a payroll tax cut or holiday.
Nigel Gault, chief economist for IHS/Global Insight, an economics consulting firm, said he liked both the infrastructure and R&D proposals but “they’re not going to
Martin Feldstein, who was economic adviser to President Ronald Reagan, said all the Bush tax cuts should be extended for two years because even letting those for the wealthy lapse would be “a blow to a very fragile economy.”
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