President Barack Obama used an afternoon press conference to present himself as the tax-cutting champion of “middle-class Americans.”
“Now’s not the time to slam on the brakes, now’s the time to step on the gas,” he said in a Monday appearance at the White House press room, where he was flanked by two television screens showing a countdown to the Jan. 1 expiration of the current temporary cut in Social Security taxes.
Most Republicans and GOP leaders are willing to extend the temporary reduction in payroll taxes, despite its impact on the Social Security fund, which is already spending more than it is receiving in taxes.
The president’s initial plan for extending the tax cut would have cut revenue into the Social Security fund by $265 billion.
A revised bill being prepared by Senate Democrats would cut tax revenue by $180 billion.
Both bills would stimulate the 2012 economy by the amount of money they cut from annual taxes.
Obama has declined to identify Democratic-backed programs that could be cut to offset the loss of Social Security taxes. Instead, he has argued that wealthy people should pay more in taxes. (ILYA SHAPIRO: President Obama’s top 10 constitutional violations)
“What I’m not willing to do is to pay for the extension in a way that hurts the economy. … It would be irresponsible to now make additional deep cuts in education [and] the basic safety net,” he said.
The president’s rhetoric on the payroll tax is a tactical reversal from his 2010 and 2011 rhetoric about the impending income tax cuts championed by President George W. Bush in 2001.
Those income tax cuts were due to expire in early 2011, prompting Republicans to warn of an impending tax hike. However, Obama and other Democrats denied the expiration amounted to a tax increase.
That was then. But now Obama is running on a progressive and populist platform in the 2012 campaign, in which he’s offering to manage the economy and tax the rich for the benefit of lower-income citizens and immigrants.
The payroll-tax cut also exemplifies a shift from August, when Democrats and Republicans vied to be seen by the public as more eager to close the $1 trillion annual federal deficit, and slow the growth of the federal government’s borrowing.
The federal government owes roughly $15 trillion, equal to all the nation’s economic activity during an entire year.
But the stalled economy has changed the public’s mood back towards unemployment, prompting increased debate about new economic stimulus proposals.