President Obama and congressional Republicans are laying out their positions more openly on the fate of the expiring Bush tax cuts as they prepare for negotiations later this month.
In an interview with CBSs 60 Minutes on Sunday evening, Obama told correspondent Steve Kroft about his wish to limit the extension of the tax cuts for those making above $250,000 a year.
I understand the Republicans have a different view, he said. And so, we are going to have to have a negotiation. And I am open to finding a way in which they can meet their principles and I can meet mine. But in order to do that, I think we do have to answer the question of how we pay for it. If in fact we're going to extend these tax cuts, then we've got to figure out what does that mean for our debt and our deficit. Because there's no getting around it. It's going to cost $700 billion to extend those over 10 years.
Kroft asked Obama if he would be open to a suggestion from House Minority Leader John Boehner, R-Ohio, who is expected to take over as Speaker of the House in January. Boehner wants to extend the current rates for another two years and roll back discretionary government spending to 2008 levels.
I think that when we start getting specific like that, there's a basis for a conversation, said Obama. I think that what that means is that, we can look at what the budget projections are. We can think about what the economy needs right now, given that it's still weak. And hopefully, we can agree on a set of facts that leads to a compromise. But my number one priority coming into this is making sure that middle-class families don't see their tax rates go up January 1.
Obama pointed out that under his proposal, those making over $250,000 a year would not see their taxes return to the rates under the Clinton administration. Only the amount above $250,000 would be taxed at those rates, so for a couple making $300,000 a year, the majority of their income would still be taxed at the current rates.
Obama also noted that he wants to extend tax breaks for businesses as well as individuals, particularly for research and development.
It's not, by the way, just tax cuts for individuals that we're concerned about, he said. There are also a bunch of provisions for businesses in terms of how business investment is treated. If they're investing in research and development here in the United States and what kind of tax breaks do they get on that, we need to provide businesses certainty on that. We've got to do that before the end of the year, and my hope and expectation is that we can solve this problem.
Unlike Boehner, House Republican Whip Eric Cantor, R-Va., who is expected to become House Majority Leader in January, opposes decoupling tax cut extensions for upper-income taxpayers for just two years, while the tax rates remain permanently at the current rates for the middle class.
I am not for decoupling the rates, he told Fox News Sunday. Because all that says to people looking to go back in and put capital to work and invest to create jobs is you're going to get taxed on any return that you can expect.
However, Senate Minority Leader Mitch McConnell, R-Ken., indicated a willingness to at least negotiate with Obama, even though he believes the tax cuts should remain permanent for both middle-class and upper-income tax payers. Were happy to talk to the president about that and all the other issues that he has on his mind, he said on CBSs Face the Nation on Sunday. But our view is, don't raise taxes on small business. We would rather not do it at any time. In fact, Ive introduced the only bill that would make the current tax rates permanent.
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