WASHINGTON (CN) – President Obama said he wants to permanently extend middle-class tax cuts to jump-start the sluggish economic recovery. “We are ready, this week, to extend tax cuts to every American making $250,000 or less,” he said Wednesday in a speech at a Cleveland community college. “You deserve a break,” the president said.
Under Obama’s plan, Bush-era tax cuts for households making $250,000 or less would become permanent, but tax cuts for households making $250,000 or more, the wealthiest 2 percent of Americans, would expire next year.
Obama says extending middle-class tax cuts will encourage consumer spending, which will boost the economy, while extending tax cuts for the top 2 percent of earners would not benefit the economy because they are less likely to spend the money.
Obama said extending tax cuts for the wealthiest Americans would cost $700 billion over the next 10 years and amounted to giving “a tax cut of about $100,000 each to folks who are already millionaires.”
“The middle-class is still treading water,” he said, “while those aspiring to reach the middle class are doing everything they can to keep from drowning.”
The speech was partly a response to an address given by House Minority Leader John Boehner, R-Ohio, in Cleveland last month, in which he called for Obama to demand the resignations of the remaining members of his economic team and asked for Congress to cut government spending.
“There were no new policies from Mr. Boehner,” Obama said of the address. “There were no new ideas. There was just the same philosophy we already tried for the last decade — the same philosophy that led to this mess in the first place: cut more taxes for millionaires and cut more rules for corporations.”
In a statement issued after Obama’s address Wednesday, Boehner said, “If the president is serious about finally focusing on jobs, a good start would be taking the advice of his recently departed budget director and freezing all tax rates, coupled with cutting federal spending to where it was before all the bailouts, government takeovers, and ‘stimulus’ spending sprees.”
In a televised interview Wednesday morning, Boehner called for a two-year freeze on all tax rates.
On Monday, Obama unveiled a $50 billion, six-year infrastructure plan for updating roads, bridges, dams and levees and building an electric grid. The plan calls for rebuilding 150,000 miles of roads, building and maintaining 4,000 miles of railroads and restoring 150 miles of airport runway. It also includes setting up an infrastructure bank to manage project funding.
“Mr. Boehner has, so far, said no to infrastructure,” Obama said. “That’s bad for America.”
Obama accused Republicans of taking credit for stimulus projects while criticizing them on the political stage. He also harangued Republicans for blocking a small business bill that would cut taxes and make loans more easily available to small businesses.
“The only reason they are blocking this is politics, pure and simple,” Obama said. “They might think this will get them where they need to go in November, but it won’t get our country where it needs to go in the long run,” he said, to cheers.