President Obama will announce in a speech in Ohio today that he’s unwilling to budge on the Bush tax cuts: the cuts on the highest brackets must expire, no matter what congressional Republicans (and even some Democrats) are saying. This will mark the first election season battle between Obama and House Republican leader John Boehner — who hopes to become Speaker next Congress, and who today proposed a minimum of a two-year extension of all current tax rates.
“Why wouldn’t we work together to make clear that all current tax rates will be extended for the next two years,” Boehner said on ABC this morning.
At a glance that would put Boehner in a similar camp as Senate Budget Committe Chairman Kent Conrad (D), former White House Budget Director Peter Orszag and other Democratss who are all proposing a temporary extension for all the Bush tax cuts. But Boehner also rejected Orszag’s grand bargain to let all the Bush tax cuts expire in two years in exchange for a full extension between now and 2012.
“[W]e can’t deal with the deficit until we’re willing to get our arms around spending, and have a strong economy,” Boehner said. “And you can’t have a strong economy if you’re raising taxes on the very people that you expect to invest in our economy to begin hiring again.”
Boehner’s proposal sets the stage, in other words, for a repeat of the same fight in two years, and, depending on the balance of power in Congress, further extensions of Bush-era tax levels.
Boehner also proposed to return spending to pre-TARP levels in 2008. “Why don’t we pass a bill this month, at 2008 spending levels, you know before the TARP, before the bailouts, before the stimulus, and lets put some certainty in the economy,” but was not asked to clarify whether his plan would be adjusted for inflation or population growth.
