Will President Obama and congressional Republicans make a deal on taxes before January 1, when the Bush tax cuts are set to expire? Will they let a set of automatic spending cuts take effect? Will they find a new way to boost job growth this coming year—or, at least, renew temporary boosters like extended unemployment insurance? I have no idea. Nobody in Washington does.
But after Wednesday’s press conference at the White House, I’m even more convinced that Obama isn’t treating this political confrontation the way he did the last two, in the winter of 2010 and the summer of 2011. This time, he has leverage over congressional Republicans. And on the question of the Bush tax cuts, the issue that has sparked the most controversy so far, he is using it.
To review the positions quickly: Republicans want to extend all of those cuts indefinitely. Obama and his Democratic allies want to extend only those that apply to low and middle incomes. They want the tax cuts that apply to incomes above $250,000—cuts that would benefit only the wealthiest Americans—to lapse.
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