President Barack Obama said Thursday he was “comfortable” with the changes made by Senate Democrats in his jobs bill on Wednesday, including a 5.6 percent surtax on millionaires starting in 2013.
The surtax on those earning over $1 million per year would replace the original proposal to raise taxes on households earning over $250,000 a year and limit the amount of their itemized deductions. “The approach that the Senate is taking I’m comfortable with in order to deal with the jobs bill,” Obama said during a news conference. "We’re still going to need to reform this Tax Code to make sure that we’re closing loopholes, closing special-interest tax breaks, making sure that the very simple principle, what we call the Buffett rule, which is that millionaires and billionaires aren’t paying lower tax rates than ordinary families, that that’s in place. So there’s going to be more work to do with respect to making our tax system fair and just and promoting growth. But in terms of the immediate action of getting this jobs bill passed, I’m fine with the approach that they’re taking."
Senate Majority Leader Harry Reid, D-Nev., worked out the changes with other Democrats in the Senate who had been reluctant to support the President’s original plan. On Wednesday, Reid fended off an attempt by Senate Minority Leader Mitch McConnell, R-Ken., to bring the original bill to the Senate floor for an up or down vote, knowing that many Democrats and Republicans would vote against the bill.
Reid also upped the amount of the surtax from 5 percent to 5.6 percent to pay for the cost of $447 billion jobs bill within 10 years, and he moved the date it would take effect from 2012 to 2013 in keeping with Obama’s pledge not to raise taxes while the economy remained weak. The changes would also position Obama and other Democrats better in their re-election chances in 2012 as the tax hike would affect fewer taxpayers and would not occur until the year after the election.
“If Congress does something, then I can’t run against a do-nothing Congress,” said Obama.
McConnell denounced the revised tax plan on the Senate floor Thursday. “Despite the President assuring Americans that ‘nobody is talking about raising taxes right now,’ and that a down economy was a horrible time to raise taxes, the new Democrat tax hike would take effect in a little over a year, when [the Congressional Budget Office] tells us the unemployment rate will still be well over 8 percent,” he said. “It's no wonder that the economy is stagnant, businesses aren't hiring and unemployment is at 9 percent. How can anyone be expected to make plans when the next ‘gotcha’ tax hike to pay for this President’s spending binge is always lurking around the corner?”