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Obama still rejects tax cut extensions

Friday, 08 June 2012   (0 Comments)
Posted by: SAIT Technical
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By Richard Rubin (Business Report/Bloomberg)

PRESIDENT Barack Obama continues to oppose extending tax cuts from former president George Bush's era for wealthier Americans, the White House said yesterday, shrugging off calls from some in Mr Obama's own party, including Bill Clinton, for a temporary extension to make more time for a deal on deficits.

"He will not support extension of the upper income Bush-tax cuts. He could not be more clear,” White House press secretary Jay Carney said.

Former US president Bill Clinton, a Democrat like Mr Obama, said this week Congress may have to temporarily extend all expiring tax cuts and spending into early next year to give legislators time to reach a deal on deficit reduction.

Mr Clinton and his supporters' stance contrasts with that of Mr Obama, who has said tax breaks for high earners should expire at the end of this year.

Republicans in Congress have seized on the statements to urge extensions of all the tax cuts.

Matt McKenna, Mr Clinton's spokesman, issued a statement on Tuesday intended to minimise differences with Mr Obama. Mr Clinton "does not believe the tax cuts for the wealthiest Americans should be extended again,” Mr McKenna said. The former president "simply said that he doubted that a long-term agreement on spending cuts and revenues would be reached until after the (November) election.”

Mr Carney referred reporters to Mr McKenna's statement yesterday and said "there's no daylight” between the president and Mr Clinton on the issue.

Mr Clinton, who appeared with Mr Obama at fundraising events in New York on Monday, said on CNBC television that Congress "will probably have to put everything off until early next year” because of Republican demands that the tax cuts for the wealthy be made permanent. Doing so would be "an error”, he said. "What I think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now and then deal with what's necessary in the long-term debt reduction plan as soon as they can, which presumably will be after the election,” Mr Clinton said.

Federal Reserve chairman Ben Bernanke has warned of a "fiscal cliff” at the end of the year because of tax cuts on wages, capital gains, dividends and estates that are scheduled to lapse. At the same time, automatic spending cuts are scheduled to begin.



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