Obama not budging on Bush tax cuts for the rich - but will GOP be open to his other ideas?

Of course, the big news overnight is that the White House will not compromise in the manner that it's former budget director, Peter Orszag, commented on Tuesday; that is, continue the Bush tax cuts in all areas, not just for those making less than $200,000 or $250,000.  From the New York Times:

It is not clear that Mr. Obama can prevail given his own diminished popularity, the tepid economic recovery and the divisions within his party. But by proposing to extend the rates for the 98 percent of households with income below $250,000 for couples and $200,000 for individuals — and insisting that federal income tax rates in 2011 go back to their pre-2001 levels for income above those cutoffs — he intends to cast the issue as a choice between supporting the middle class or giving breaks to the wealthy.

With many Democrats running vulnerable in November, it's no surprise that some are against the White House's stance.  Yesterday Democratic gubernatorial candidate Alex Sink announced she is for maintaining all of the tax cuts for now, which was totally not surprising, though some of her liberal supporters were upset (earth to those Democrats: Sink is a Democrat, but she ain't liberal).

Also yesterday, South Florida Democrat Ron Klein, in a spirited race to maintain his Congressional seat against Republican Allen West, also came out for maintaining the tax cuts to the wealthiest 2% of the nation.  At least Klein is only calling for a one year extension:

“Every day, I hear from families that are still struggling with bills and people who can’t find a job no matter how hard they try, so I believe right now, our top economic priority has to be job creation. In order to achieve that, we need tax credits for small businesses that will help create new American jobs, while also promoting investment and growth. As we work to rebuild the economy, I support a one-year extension of the so-called Bush tax cuts.”

Don't be surprised if other Florida Dems follow Sink and Klein on this issue.  As we wrote yesterday, some economists, not all from the Milton Freidman school of economics, are also now saying that perhaps for it would be best to hold off on getting rid of those tax cuts for the wealthy, though others sincerely disagree.

President Obama is poised to deliver his major address on rebooting the economy  in Cleveland at 2:10 EST today, but despite the fact that some of the provisions have been desired by Republicans for a long time, there's no incentive for them to support them now, and thus analysts believe they will die on the vine.

From today's Wall Street Journal:

Mr. Obama travels to Cleveland to deliver a key-note economic speech Wednesday that will outline plans to enhance and permanently extend the research and experimentation tax credit, allow businesses to write 100% of their investments off their taxes through 2011, and pump another $50 billion of infrastructure spending into the economic bloodstream.

Businesses say the tax proposals are helpful but no substitute for what they really want: broad-based changes to the corporate tax code and an extension of President George W. Bush's tax cuts, which expire in January. Republicans have criticized the proposals as a Stimulus II, while urging Democrats running for office to reject it.

Despite the calls for the speech to be dead on arrival, the White House is actually trying to do something here.  Again from the Journal:

The White House has worked hard to gain political traction ahead of the Cleveland speech. Mr. Obama called Sen. George Voinovich (R., Ohio) over the weekend to discuss the infrastructure plan. The White House's business liaison office reached out to the Business Roundtable to discuss the business-investment and research-and-development proposals.

Some legislative discussions have begun. The Democrats could tack a version of an R&D extension or business-investment incentive onto legislation that extends the Bush tax cuts for the middle class, but not to households earning more than $250,000.


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