(CNN) – The White House and congressional Republicans are blaming each other for holding America's economy 'hostage' by refusing to back their respective proposals to extend the politically decisive Bush-era tax cuts.
In his weekly address Saturday, President Barack Obama urged House Republicans to act on the Democrat-controlled Senate bill passed this week to extend tax cuts for middle income earners, though Republicans are calling for an extension of all the current tax rates.
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Pointing to the Senate's passage of the White House-backed proposal, the president called on House Republicans to support the bill.
"Now it comes down to this: If 218 Members of the House vote the right way, 98% of American families and 97% of small business owners will have the certainty of knowing that that their income taxes will not go up next year," said Obama of the plan, which would extend tax breaks for those families making $250,000 and under, or individuals earning $200,000 or less, but allow the cuts for upper-income Americans to expire at the end of the year.
The president said that while both sides are in agreement that the proposed tax cuts should be extended for the middle class, the Republicans in Congress are using these cuts as leverage to extend the tax cuts to the wealthiest earners.
"You see, Republicans in Congress and their nominee for president believe that the best way to create prosperity in America is to let it trickle down from the top. They believe that if our country spends trillions more on tax cuts for the wealthy, we'll somehow create jobs – even if we have to pay for it by gutting things like education and training and by raising middle-class taxes," said Obama.
The president continued: "They're wrong. And I know they're wrong because we already tried it that way for most of the last decade. It didn't work. We're still paying for trillions of dollars in tax cuts that benefited the wealthiest Americans more than anyone else; tax cuts that didn't lead to the middle class jobs or higher wages we were promised and that helped take us from record surpluses to record deficits."
GOP leaders are pushing back in their call for a renewal of all Bush-era tax cuts, including cuts for those earning over $250,000.
"Mr. President, I'll tell you what - if you want to show that you stand with American small business owners, the best thing you can do is drop your plan to increase their taxes on January 1. This small business tax hike, according to Ernst & Young, will destroy more than 700,000 jobs," House speaker John Boehner said Thursday.
Utah Sen. Orrin Hatch called folly on the Senate's tax proposal, insisting that job creators are also at risk if anything short of all the tax cuts are renewed.
"This isn't the time for political games and vilifying job creators. The President and his Washington allies need to stop holding America's economy hostage in order to raise taxes on those trying to lead our economic recovery," Hatch said Saturday in the Republican weekly address.
In the address, Hatch, a ranking Republican member of the Senate Finance Committee, pushed for his tax plan that he said would simplify the American tax code for next year as well as continue all the current tax rates.
"In just over five months, middle-class families, job creators and seniors will get hit with a massive tax hike unless the president and Congress act. This would mean that taxes would go up on virtually every single taxpaying American," said Hatch, speaking to the looming, end-of-the-year deadline for Congress to act in order for Americans to maintain the tax breaks set in place under the Bush administration.
The Republican controlled House will vote on a separate version of the tax plan next week.
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