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Obama Slams GOP Over Tax and Spending Cut Plans

Intending to talk about colleges and worker training, President Barack Obama on Monday suddenly found himself in a spirited, election-year debate with a business advisory group about whose tax cuts should be extended and for how long.

President Barack Obama
Photo by: Pete Souza
President Barack Obama

At a meeting of the President's Economic Recovery Advisory Board, Harvard economist Martin Feldstein pressed Obama to keep all the Bush-era tax cuts, not just the middle-class cuts the president wants to extend.

"That would give a boost to confidence," Feldstein declared. SEC Chairman William Donaldson added that an extension would allay business and consumer uncertainty.

Obama replied that his stand would benefit 98 percent of American taxpayers. "You'd think (that) would provide some level of certainty," he said.

Obama also reiterated his view that top-income tax brackets would do little to boost the recovery, since the wealthy aren't holding off buying flat-screen TVs and other big-ticket purchases for lack of a tax cut. Plus, he said, those tax cuts are unaffordable.

"If we were going to spend $700 billion, it seems it would be wiser having that $700 billion going to folks who would spend that money right away," he said.

Obama dismissed the notion that the well-off—he included himself—would simply "take our ball and go home" if they didn't continue to get a big tax cut.

Former Federal Reserve Chairman Paul Volcker, who heads the advisory group, backed up Obama. "I want to assure you that my psychology will not be affected," he declared amid laughter.

Congressional Democratic leaders have postponed a vote on tax cut extensions until after the November election, but Obama has accused Republicans of holding middle-class cuts "hostage" by demanding top-end cuts, too.

Penny Pritzker, a real estate executive and longtime Democratic fundraiser who serves on the board, said panel members were discussing whether they should take a formal position on the issue.

Much of the hour-plus meeting was devoted to an administration initiative, "Skills for America's Future," that would expand partnerships between top U.S. companies and community colleges. It was announced on the eve of a White House summit on community colleges, which is being led by community college teacher Jill Biden, Vice President Joe Biden's wife.

Gap Inc., McDonald's, Accenture and other big-name companies have announced their backing.

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