President Obama will call for a one-year extension of the Bush-era tax rates for people who earn less than $250,000 per year.
Obama will make the announcement at an event in the East Room on Monday, the White House confirmed to The Hill.
The announcement will intensify the debate over the series of lower tax rates passed during the George W. Bush presidency. Obama extended the rates in 2010 in hopes they would help boost the struggling economy, but vowed to oppose further extensions. The current rates are scheduled to expire at the end of 2012.
The GOP House plans to vote on a permanent extension all the tax rates later this month, setting up a clash with the White House.
A campaign official told CNN that the Obama team intends to “amplify the president’s message on middle-class tax cuts” and make it a centerpiece of his agenda through a series of events in key swing states later this week.
Obama’s decision to set $250,000 as the threshold for the tax extension also puts him at odds with many congressional Democratic leaders who had called extending the rates for families earning below $1,000,000 a year.
Sen. Charles Schumer (D-N.Y.) has suggested that many families making $250,000 are not rich. “They are not rich, and in large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that’s associated with wealth in America,” he said last year.
Obama’s decision was hinted at on Sunday by senior campaign adviser Robert Gibbs, who said the president was committed to allowing the Bush-era tax rates expire for wealthy earners.
“Let’s make some progress on our spending by doing away with tax cuts for people who quite frankly don’t need them, tax cuts that haven’t worked and have them pay their fair share,” Gibbs said, adding that Obama was “100 percent” committed to forcing the wealthy to pay more.
But Republicans are insistent on extending the current rates for all taxpayers. Senate Minority Leader (Mitch McConnell R-Ky.) on Sunday said an extension should be tied with a “hard requirement” to address comprehensive tax reform.
The prospect of expiring lower tax rates and automatic spending cuts enacted by last summer’s deal to raise the debt-ceiling has many lawmakers and business groups fearing an impending “fiscal cliff” which could further hamper the economic recovery.