President Obama is prepared to veto a bill to head off the fiscal cliff -- a trillion dollars worth of spending cuts and tax hikes set to automatically trigger at the end of the year -- if Republicans continue to refuse to raise tax rates on the wealthy, administration officials told The Washington Post.
The president has been quiet on the issue of the fiscal cliff, but according to Obama’s aides, the administration is gearing up to play hardball with Republican lawmakers over who should continue to receive the Bush-era tax cuts, which currently decrease annual tax rates on all income levels.
In July, the Democrat-led Senate voted to extend the tax credits to families making less than $250,000 and individuals making less than $200,000 each year.
One week later, the Republican-dominated House voted to extend the tax rates to all income levels for another year, including the nation’s wealthiest, saying it would be a fatal mistake to raise taxes on the upper middle class amid a struggling economy. “Two years ago the president said we shouldn’t raise taxes in the time of the slow economy and I agreed, Republicans agreed . . . . And now the president wants to raise taxes on the so-called rich, which is really small business owners,” House Speaker John Boehner, R-Ohio, said on the House floor in August. “My goodness, raising taxes in this economy is a terrible mistake.”
RELATED: CEOs Sound the Alarm About Debt and Taxes
Meanwhile, Democrats say giving tax cuts to the wealthiest hurts the middle class. For you to continue to say that this is going to be a burden on small businesses is delusional. In 2008, we were 11 trillion dollars in debt. We quite simply can’t afford to give millionaires another tax break. You shrunk the middle class with your great economic ideas between 2001 and 2008. What you did was make the rich richer,” Rep. Bill Pascrell, D-New Jersey, said.
This won’t be the first time the president has attempted to roll back the high-end cuts. In 2009, he unsuccessfully tried to end the tax breaks on the wealthy, but Republicans, who made huge gains in the 2010 midterm elections, threatened to block all legislation in the lame-duck session unless the cuts were extended to all income levels — and they were.
For more news on the approaching fiscal cliff, follow us on Twitter@Fiscalcliffnote
