September 10th, 2010
06:04 PM ET
12 years ago

Obama Middle Class Tax Cuts – Reality Check

[cnn-photo-caption image= caption =" Democratic sources are unsure if they have the support to pass President Obama's plan to extend only the Bush tax cuts for families making $250,000 or less."]
Washington (CNN) – While President Obama and Democratic leaders have settled on a strategy to extend only the Bush tax cuts for families making $250,000 or less, senior Democratic sources concede they're not sure whether they can make that political push a legislative reality – especially before election day.

The sources admit that the immediate challenge isn't Republicans who also want to extend tax cuts for wealthier Americans, but many of their own moderate Democrats, especially those who are trying to hold onto their seats and do not want to be accused of raising taxes.

Democratic congressional leadership sources say they have not yet decided on how to address that tax cut quandary, but say it will be the most prominent order of business when House and Senate Democrats return to Washington and hold caucus meetings next Tuesday.

The sources say that President Obama, Speaker Pelosi and Harry Reid have all agreed that sticking to then-candidate Obama's pledge to do away with the Bush tax cuts for the wealthiest Americans is a good way to help re-energize a disillusioned Democratic base. Democratic strategists say demoralized Democratic voters are one of their biggest Election Day concerns.

That's why the President used his news conference to press the argument that "Instead of tax cuts for millionaires, we believe in cutting taxes for middle-class families."

But, in the Senate, three Democrats and one Independent senator have already said they want to extend the Bush tax cuts for those making $250,000 or more, calling it essential not to raise taxes in a bad economy.

A Senate Democratic leadership source says it is still unclear how they will work around that opposition when crafting legislation, which they do intend to try to bring to the Senate floor this month.

And a House Democratic leadership source admits that it is an open question there too whether Speaker Nancy Pelosi and other Democratic leaders will be able to convince moderate Democrats to go along with an extension for only middle class Americans.

Democrats like Rep. Harry Mitchell of Arizona, and Rep. Jim Matheson of Utah, for example, have said they want to extend tax cuts for all tax rates until the economy is in better shape.

House Democrats hope the Senate will move first, as they try to shore up support for their plans in a jittery caucus.

One compromise idea Democratic sources say could be considered is changing the threshold, and extending tax cuts for families making under $1 million. But sources caution that it is unclear how viable an option that could be.

Sources in both the Senate and the House also say despite their desire to take this issue up before the election, differences among Democrats may stall the legislation completely until later in the year – after voters go to the polls.

Filed under: Congress • issues • President Obama • Taxes
soundoff (22 Responses)
  1. Hammerer

    If obama spent 1/2 as much time and energy working on the problems of the economy as he spends defending islam and apologizing to the muslims the economy would be in recovery instead of spinning out of control.

    September 10, 2010 05:57 pm at 5:57 pm |
  2. truth squad

    Republicans need to challenge the assertion that $250K is rich.

    If you live in Boston and own a house and have a couple kids $100K is just getting by.

    If Obama were to say $1M is rich, then he might have a point.

    Of course the unreported fact is that more millionaires and Billionaires give money to Democrats and actually ARE Democrat Senators to boot.

    The old saying the GOP is for he rich is no long true. Democrats really represent those who have inherited wealth.

    September 10, 2010 06:03 pm at 6:03 pm |
  3. barry

    President Obama is so far outside of his ability. It has to be taking its toll on his family. He would do his family, himself, and the American people a favor by saying he won't run again in 2012. He could then set back enjoy the next 2 years, work on getting his Library together and any other legacy things he wants. This country needs a strong, mature, uniting President at this critical time in history.

    September 10, 2010 06:05 pm at 6:05 pm |
  4. Claudia, Houston, Tx

    We all know the lobbyist will buy out Republicans to keep the Bush tax cuts.

    September 10, 2010 06:07 pm at 6:07 pm |
  5. Albo58

    Trying to impress his far left followers, this President is going after those mean old rich know, the people that pay the most taxes in this country...the people we like to call EMPLOYERS...the people that conduct their business, small and large, in our country vs. moving it overseas...the people that BUY things in this country...the people that have for a large part have done well through ingenuity and HARD know, those people!

    September 10, 2010 06:11 pm at 6:11 pm |
  6. Naqib

    Internal strife among the Democrats

    Beautiful Thing

    September 10, 2010 06:15 pm at 6:15 pm |
  7. Papasan in AZ

    What does it take for Washington to see that helping Main Street USA will help themselves in November?

    September 10, 2010 06:21 pm at 6:21 pm |
  8. phoenix86

    Once again Obama divides America. Why $250,000? Why not $100,000? Why not $2,500,000?

    The love of arbitrary applications of rules and laws is one of the primary causes of this recession.

    September 10, 2010 06:21 pm at 6:21 pm |
  9. Dave

    A tax is a tax is a tax by any other name (healthcare) is still a tax!!!

    September 10, 2010 06:25 pm at 6:25 pm |
  10. LacrosseMom(the real one)

    Well, Dana Bash, you need to re-title, your article. Seems to me that the ones who need a "reality check" are the Republicans.

    The Bush Tax Cuts are STILL in effect, and have been for years. HOW has giving the wealthiest ....1%....... a huge tax cut helped the U.S. economy? I want SPECIFICS.

    Now..... giving those who earn $250,000 and under a tax cuts, makes perfect sense. You see, folks, Middle Class families are the......backbone of the American Economy, give us a break and you will see us spend money to upgrade cars, homes, TVs, etc. The Wealthy, end up hoarding their money, it is fact.

    In NOvember vote NO for the Party of NO – solutions, no new ideas, no cooperation, no clue.

    September 10, 2010 06:26 pm at 6:26 pm |
  11. Ron , West Coast

    It`s well past time for congress to let the tax cuts for the wealthiest 2% of the country expire in January 2011`, and to let the tax cuts for the middle class continue indefinitely . The republicans are playing politics with the future of the middle class by obstructing and putting up roadblocks at every turn . The GOP have gambled on the fact that our economy is still going to take time to recover and they are also banking on the recovery not taking hold before the November elections , and thinking that the voting public is stupid enough to be hoodwinked ( have amnesia ) into voting for those republican do nothing , unpatriotic idiots .

    September 10, 2010 06:28 pm at 6:28 pm |
  12. jim

    This is nothing more than an attempt to focus the voter's attention away from his failed economic policies .Pure Obama tactic of class warfare and envy. I hope voters aren't fooled. Also, now there is no reason to label republicans as the party of the rich. There are more wealthy dems including Obama and sooner than later Americans will realize this. The media has propagated this notion long enough.

    September 10, 2010 06:38 pm at 6:38 pm |

    Passed under reconciliation and given a ten year limit, when it expires will be a BUSH tax increase........Why the heck they keep allowing Reps to say the Dems are raising taxes is beyond me......Maybe they shouldn't have been forced in the first place.....

    September 10, 2010 06:49 pm at 6:49 pm |
  14. Allen in Hartwell GA

    I suppose the House Democrat leaders might have a different opinion, but in my humble opinion if a Democrat has to act like a Republican in order to get reelected, then we might as well call them a Republican.
    I have no party loyalty for so-called moderate democrats who rode into the House on the wave of anti-Republicanism after the country was brought to the brink of ruin by Bush and his rubber-stamp Republican-led Congress.

    September 10, 2010 06:57 pm at 6:57 pm |
  15. harold

    If they are afraid of doing it.. then just extend the tax deal a year...and retro it later to help the government pay its bills and the pay for the WAR you Republicans wanted so ba.......but did not want to pay for...get it?

    September 10, 2010 07:04 pm at 7:04 pm |
  16. Got a laugh?

    Why do you need a compromise? Dont you just need 50+1 in the Senate? I mean isn't this what reconciliation all about? Raise the taxes on 250K+ families already. BTW, I am one of them and I welcome this increase.

    September 10, 2010 07:04 pm at 7:04 pm |
  17. Brandon

    Well you go to war that is not funded you have to expect that you are going to have to pay for it eventually. It is the same argument that the GOP are using against health care, how do you pay for it? The only difference is health care would actually give a service to the American people, while Bush's war only caused the world to frown upon America.


    September 10, 2010 07:05 pm at 7:05 pm |
  18. Brandon

    Your comment is awaiting moderation.

    Well you go to war that is not funded you have to expect that you are going to have to pay for it eventually. It is the same argument that the GOP are using against health care, how do you pay for it? The only difference is health care would actually give a service to the American people, while Bush's war only caused the world to frown upon America.


    September 10, 2010 07:06 pm at 7:06 pm |
  19. Gary's Thoughts

    Extend the Bush tax cuts on all earned income for all Americans! We work hard to earn the money, we should keep it. It doesn't belong to the government and they don't deserve the money....let them first demonstrate that they can live within their current budget (e.g. get rid of the deficit) then we can see if taxes could go up later.

    September 10, 2010 07:18 pm at 7:18 pm |
  20. Cynthia

    Just keep hammering the fact that the Republicans want to extend the tax cuts for the riches of the rich. That is ALL they care about! America had better wake up to them and fast. They have unlimited corporate money, both from the US and from foreign sources pouring in through these fake organizations thanks to the Republican run Supreme Court. DON'T BE FOOLED BYTHEM!

    September 10, 2010 07:30 pm at 7:30 pm |
  21. A Duh

    my goodness, Ms. Palin does seem quite testy and sensitive towards good natured pokes. What's got her so gash darn insecure?

    Can't take the heat SWEETHEART? Then get out of the kitchen (not that she ever step foot in one like a good christian mother with family values allegedly should. In fact, shouldn't she be home barefoot and pregnant rather than having her kids raise her other kids?)

    September 10, 2010 07:30 pm at 7:30 pm |
  22. Dave

    Since lowering taxes has proven throughout our history to RAISE revenue for the government, make the economy grow, and cause the wealthy to pay a greater proportion of taxes.... why is it liberals can not fathom this? It was proven under Harding and Coolidge and JFK (who was all for lower taxes to increase revenue and bolster the economy) and Reagan and even Bush 2.

    Yet, as usual, liberals refuse to look at the facts of economics.

    September 10, 2010 07:32 pm at 7:32 pm |