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President Obama today urged Congress to extend the 2001/2003 tax cuts for households making $250,000 or less and insisted lawmakers let those provisions expire for those making more. As the president himself said, “I’m not proposing anything radical here.”
He’s right. And that’s too bad. This was an opportunity for Obama to at least tie an extension of the Bush-era tax cuts to tax reform and deficit reduction next year. But instead of using his bully pulpit to demand such a linkage, Obama offered little more than a vague suggestion:
“Next year, once the election is over, [once] things have calmed down a little bit, based on what the American people have said and how they’ve spoken during that election, we’ll be in a good position to decide how to reform our entire tax code in a simple way that lowers rates and helps our economy grow, and brings down our deficit — because that’s something that we’re going to have to do for the long term.”
Not exactly a ringing endorsement of either tax reform or deficit reduction. Not exactly leadership either.
Of course, a demand that Congress link an extension of the Bush-era tax cuts to long term fiscal reform—especially one made in the heat of campaign season—would be entirely unenforceable. Just look at how Congress is responding to the deadlines it set as part of last summer’s debt limit deal. Still, the president could have tried a lot harder to push Congress for a quid pro quo.
Instead, Obama chose to replay the politics of the past 3 ½ years. His message: “I want to cut taxes for regular folks and raise them for rich people. Republicans are willing to raise taxes on regular folks to protect their rich pals.” The Republican counter: “Obama favors job-killing tax increases on small businesses and other job creators.”
This is tiresome and not productive. The last time the two sides danced this dance, we got a debt limit crisis that, at best, added uncertainty to an already-nervous economy. Obama’s announcement today moves us toward yet another replay of that dismal experience.
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