WHITE HOUSE — President Barack Obama on Monday called on Congress to approve a one year extension of Bush-era tax cuts for people making less than $250,000 per year, a proposal that has been rejected by congressional Republicans and likely Republican Party presidential nominee Mitt Romney.
Obama’s challenge to Congress came as Republicans seek an extension of all cuts for middle and upper-income Americans made under Obama’s predecessor George W. Bush.
As Obama campaigns for reelection, he is emphasizing what he says are the benefits of his policies and fairness for the middle class – contrasting his proposals with those of former Massachusetts Governor Mitt Romney.
The president seeks to portray Romney as the protector of the wealthy who would enact $5 trillion of new tax cuts in addition to the Bush-era reductions that have been the subject of partisan debate with Congress for the past three years.
Saying the tax issue reflects the political stalemate in Washington and basic differences in vision for the country, Obama said his proposal would help strengthen the middle class.
“I am not proposing anything radical here. I just believe that anybody making over $250,000 a year should go back to the income tax rates we were paying under [former President] Bill Clinton – back when our economy created nearly 23 million new jobs, the biggest budget surplus in history and plenty of millionaires to boot,” Obama said.
In a compromise with congressional Republicans in 2010, Obama agreed to a two year extension of Bush-era tax cuts, but said he would not agree to another extension.
If Congress does not act before the end of this year, rates for all Americans will increase. Economists warn of a potential double punch to the economy from this and automatic mandatory spending cuts beginning at the same time.
Republicans rejected Obama’s proposal in advance. House of Representatives Speaker John Boehner said Obama is “doubling down” on tax increases that would harm small businesses. A Romney campaign statement accused Obama of responding to recent bad economic news with a “massive tax increase,” saying the president “doesn’t have a clue how to get America working again and help the middle class.”
The exchanges over tax policy follow recent government economic reports, showing unemployment remaining at 8.2 percent with only 80,000 jobs created in the month of June.
President Obama is facing opposition from some in his own Democratic Party, who advocate extending tax rate reductions for everyone earning up to $1 million a year.
The exchanges on taxes come as Obama and the Romney campaign further shape their positions on the economy with about four months until the presidential election.
Public opinion surveys show a tight race nationally between President Obama and Mitt Romney. Some surveys show the president leading in key battleground states such as Pennsylvania and Ohio.
Obama will visit the Midwestern state of Iowa on Tuesday to deliver remarks at the home of a middle class family that would face a substantial tax increase, if Congress does not to act by the end of the year.