President Obama will meet at the White House on Wednesday with Democratic Congressional leaders, as Democrats coordinate strategy on Obama’s proposal to preserve Bush-era tax cuts only on income up to $250,000.
The White House meeting comes as Republicans in the Senate are pushing for an immediate vote on the tax issue. Democrats in the Senate would prefer to vote later this month on proposals to allow the tax cuts to expire on the wealthy, along with a Republican proposal to extend the tax cuts at all income levels.
The White House has been working to coordinate its tax message with Congressional Democrats, some of whom had pushed to extend the tax cuts on income up to a $1 million instead of $250,000— a threshold they believed would better highlight the GOP’s unwillingness to extend tax cuts for the middle class unless paired with cuts for the ultra wealthy.
The Bush tax cuts are set to expire at the end of the year, when deep automatic spending cuts are also set to take affect. Analysts worry the combination of steep tax increases and sudden budget cuts could throw the economy into a recession, at least temporarily.
But until the election, discussions about how to avert the twin fiscal challenges are likely to be as much political posturing for voters than serious negotiations.
The White House said the 2:15 p.m. meeting would include Senate Majority Leader Harry M. Reid (D-Nev.), House Minority Leader Nancy Pelosi (D-Calif.) and other legislative leaders and would focus on Obama’s “legislative agenda for the coming months.”
On Tuesday, Treasury Secretary Timothy Geithner and Obama campaign adviser David Axelrode met with Senate Democrats at their weekly closed-door lunch to explain why Obama believed it was best to stick with the president’s long-held position—that the tax cuts should expire on all income above $250,000.
“There’s an economic consideration obviously, and there’s also the revenue associated,” Senate Budget Committee Chairman Kent Conrad (D-N.D.) said following the meeting, talking about Geithner’s explanation.
To that end, Republicans pushed Wednesday to amend a Democratic bill in the Senate that would provide new tax breaks to small businesses that hire workers or expand their payrolls with proposals to extend all Bush era tax cuts.
The move would allow immediate Senate votes on the issue. Republicans proposed a vote to extend the tax cuts for all income levels, as they favor, along with a vote on allowing the cuts to expire on income above $250,000, as Obama proposed.
“The Senate should make itself clear which policy it supports. This is our chance to do it,” said Senate Minority Leader Mitch McConnell (R-Ky.).
Reid blocked the move, indicating that the Senate should first vote on the Democrats' proposal on small businesses and later this month move
into discussion of the expiring tax cuts.
That parliamentary debate is likely to consume the remainder of the day in the Senate and could threaten the underlying Democratic measure—for which Republicans have expressed some measure of support.