Middle class tax cuts gain support

House GOP leader would vote for bill

By David Herszenhorn
New York Times / September 13, 2010

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WASHINGTON — The House Republican leader said yesterday that he was prepared to vote in favor of legislation that would let the Bush-era tax cuts expire for the wealthiest Americans if Democrats insisted on continuing the cuts only for families earning less than $250,000 a year.

Speaking on CBS’s “Face the Nation,’’ Representative John A. Boehner of Ohio made clear that he supports continuing the lower tax rates at all income levels and said Democrats would be making a mistake by increasing taxes on anyone, given the weak economy.

But Boehner said that absent any other option, he would vote in favor of legislation proposed by President Obama, House Speaker Nancy Pelosi, and other Democratic leaders who want to continue the lower rates only for Americans they regard as middle class.

“If the only option I have is to vote for some of those tax reductions, I’ll vote for them,’’ Boehner said in response to questioning by the program’s host, Bob Schieffer, who pointedly asked whether Republicans were willing to hold the tax breaks for most Americans “hostage’’ to insist on continuing the lower rates for the highest earners.

As Congress returns to Washington today with lawmakers in full campaign battle mode, Democratic leaders have drawn up a daring — and potentially unrealistic — agenda for the abbreviated fall work period.

In addition to extending the Bush tax cuts for all but the wealthiest Americans, the Democratic agenda includes efforts to aid small businesses, finance the federal government until after the contentious election, and approve a new round of infrastructure spending to pump up the sputtering economy.

But with many voters angry about government spending, progress on much of that agenda is considered doubtful by some lawmakers.

Income tax cuts passed under President George W. Bush will expire at the end of this year unless Congress acts and Obama signs the bill.

The cost of extending the tax cuts for everyone for the next 10 years would approach $4 trillion, the Associated Press reported, citing congressional estimates. Eliminating the breaks for the top earners would reduce that bill by about $700 billion.

Boehner’s position on the extension, which he had not previously articulated, represents a major strategic move by Republicans, who are increasingly optimistic about taking control of the House in November.

His decision also raises pressure on Democrats, who are increasingly divided among themselves over what to do about the tax cuts.

At least five Senate Democrats have already voiced public support for continuing the lower tax breaks at all income levels, at least temporarily. That suggests that Democrats could come up short of the 60 votes needed to overcome procedural obstacles for a bill that would allow the cuts to expire for the wealthy.

Boehner, in the television interview, said he agreed with those Democrats and suggested he was content to let them fight the Democratic leadership and the White House.

“I think raising taxes in a very weak economy is a really, really bad idea,’’ Boehner said, adding, “I think there is a growing chorus on Capitol Hill to extend all of these tax rates.’’

Boehner also made clear that he would not cast his vote quietly.

“If the only option I have is to vote for those at 250 and below, of course I’m going to do that,’’ he said. “But I’m going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.’’

In recent days, Boehner has called for extending all the Bush tax cuts for two years and freezing government spending at 2008 levels. In addition to the lower marginal income tax rates, aides said Boehner would like to continue the moratorium on the federal estate tax, which is also due to expire Dec. 31.

The one-year elimination of the estate tax has allowed some extremely wealthy Americans to leave enormous inheritances without paying any federal tax. Republicans have long criticized the estate levy as double taxation because the assets were generally taxed as income when they were first earned.

In the interview yesterday, Boehner also challenged Democrats to pass the annual spending bills before the November election as a way of demonstrating their commitment to reducing federal spending.

Democrats are planning to adopt a temporary spending resolution that would finance government operations until after the election and thereby avoid a messy budget fight until the outcome of the midterm campaign is determined.

White House press secretary Robert Gibbs issued a statement yesterday saying, “We welcome John Boehner’s change in position and support for the middle -lass tax cuts, but time will tell if his actions will be anything but continued support for the failed policies that got us into this mess.’’

Austan Goolsbee, the new chairman of the White House Council of Economic Advisers, said on ABC’s “This Week’’ that he welcomes Boehner’s comments. “If he’s for that, I would be happy,’’ Goolsbee said.

Goolsbee also said he hopes Democratic lawmakers who want to extend taxes across the board will join Obama and others in the party in supporting legislation aimed at the middle class before the November elections.