President Obama is threatening to veto any legislation that extends all the tax cuts set to expire at the end of the year, as he presses Congress to extend those cuts only for families whose yearly income is less than $250,000 — and raises taxes on everyone earning more.
The veto threat sets the early tone for what is expected to be a contentious battle between Democrats and Republicans through the rest of the year as they seek to avoid the so-called “taxmageddon” — the sudden increase in taxes on all Americans that will occur if Congress doesnt vote to extend some or all of the Bush-era tax rates.
Obama will press his case Tuesday afternoon during an address at a community college in Iowa. Ahead of that speech, Republican National Committee Chairman Reince Priebus told Fox News that the presidents proposal is a “sham” which, if enacted, would cut into already meager economic growth. He accused Obama of playing a “divisive rich versus poor game.”
The president, amid such charges of class warfare, urged Congress Monday to pass a bill that deals with the middle-class tax rates only. Lawmakers then can move on to a separate debate over extending the rates for top earners, Obama said, though he made clear he is adamantly opposed to doing so.
“I will fight to end them,” Obama said Monday, speaking in the East Room of the White House. He added that he doesnt want that debate to “threaten” those making less than $250,000. When asked later in a TV interview with North Carolinas WRAL whether he would veto any bill that extended all the tax cuts, Obama said, “yes, and the reason is, we cant afford it.”
In his earlier remarks at the White House, Obama argued that sustaining the current tax rates for top earners puts too big a hole in the federal budget, saying “we cant afford to keep that up.” Obama called on Congress to extend those rates, for one year, for families earning less than $250,000 — failure to do so, he said, would be a “blow” to families and a “drag” on the economy.
“We dont need more top-down economics,” Obama said. “We need policies that grow and strengthen the middle class.”