At his post-shellacking press conference this afternoon, President Obama said that he’ll sit down with Democratic and Republican congressional leaders before the end of the year to reach a compromise on extending the Bush tax cuts.
“[M]y goal is to sit down with Speaker-elect Boehner and Mitch McConnell and Harry and Nancy sometime in the next few weeks and see where we can move forward in a way that, first of all, does no harm; that extends those tax cuts that are very important for middle-class families; also extends those provisions that are important to encourage businesses to invest, and provide businesses some certainty over the next year or two,” Obama said. “And how that negotiation works itself out I think is too early to say. But this is going to be one of my top priorities, and my hope is, is that given we all have an interest in growing the economy and encouraging job growth, that we’re not going to play brinksmanship but instead we’re going to act responsibly.”
A quick primer:
Before the election, Obama pressed Congress to extend Bush’s middle-income tax cuts, while letting tax cuts on the top two income brackets expire. Republicans wanted to extend all of them, at least temporarily. Senate Minority Leader Mitch McConnell introduced legislation to make all of them permanent.
But in the end Senate Democrats punted and a sizable bloc of House Democrats, fearful of GOP attacks, decided that Congress should address the issue after the election. Of course, having missed a chance to seize a winning issue, a huge chunk of that bloc just lost.
Fast forward to today. Congress returns on November 15. All the tax cuts expire on January 1, 2011. And today Obama signaled that, in the wake of the election, he will not force a showdown over tax cuts for the wealthy. He’s counting on the GOP to accept a compromise, but just today Speaker-to-be John Boehner reiterated the Republican position that all tax cuts should be renewed.
That leaves three likely options:
- 1. The middle-income cuts will be extended permanently, and the higher-income cuts extended temporarily.
- 2. All the cuts will be extended temporarily, and the whole fight will play itself out again in a couple years.
- 3. The White House and GOP will reach an impasse and all the tax cuts will expire.
Let the lame duck session begin!
