Economic progress is 'painfully slow': Obama

President Barack Obama has called on Congress to adopt measures to cut taxes for businesses and middle income Americans as he said that the recovery has been 'painfully slow.' Obama wants to let the rates rise for the rich taxpayers and blamed the Republicans for advocating flawed policies that led to global recession, reports Roger Runningen and Hans Nichols of Bloomberg Businessweek.

"People are frustrated and angry and anxious about the future," Obama said in a campaign-style speech today at Cuyahoga Community College West Campus in Parma, Ohio, outside Cleveland. "I understand that. I also understand that in a political campaign, the easiest thing for the other side to do is ride this fear and anger all the way to Election Day."

The president's insistence on letting the top tax rates expire at the end of this year sets up an election-year confrontation with Republicans, who are seeking to take control of the House and Senate with campaigns focused on the economy and the federal budget deficit.

Targeting Boehner

Obama repeatedly made reference to the coming election and singled out House minority leader John Boehner for criticism. Boehner, who likely would become House speaker if Republicans take over that chamber, delivered a speech on the economy in Cleveland August 24.

"There were no new policies from Mr. Boehner," Obama said. The Ohio Republican offered "the same philosophy that led to this mess in the first place: cut more taxes for millionaires and cut more rules for corporations."

"Those policies gave us the illusion of prosperity," Obama said. Republicans, he said, have refused to work with Democrats 'to tackle our problems in a practical way.'

Boehner and Senate Republican leader Mitch McConnell of Kentucky are advocating a compromise on income taxes that would keep rates the same for all taxpayers for two years. The idea was suggested by Obama?s former budget director, Peter Orszag, in a column in the New York Times published September 6.

"If the president is serious about finally focusing on jobs, a good start would be taking the advice of his recently departed budget director and freezing all tax rates," Boehner said in a statement after Obama's speech.

Tax Cut Debate

Dan Pfeiffer, White House communications director, said the Republican proposal wouldn't change the status quo.

"We've seen this movie before," Pfeiffer said. "In 2001 when the original tax cuts were passed they were pitched as temporary, they had a 10-year life to them, and now here we are at the end of it and they want to make it permanent again."

Obama wants to extend tax cuts passed under former President George W. Bush for those earning less than $200,000 per individual or $250,000 per couple while letting rates for those who make more rise after the end of the year.
"We should not hold middle-class tax cuts hostage any longer," Obama said. "We are ready, this week if they want, to give tax cuts to every American making $250,000 or less."

Administration Proposals

Obama is also asking Congress to take up proposals to spend $50 billion to repair and rebuild the U.S. transportation infrastructure, permanently extend a research and development tax credit and let businesses deduct the full cost of capital investments in the year the expenditures are made, instead of writing them off over periods of as long as 20 years.

Another administration initiative to give $12 billion in tax breaks to small businesses and provide $30 billion to help free up credit to such companies is pending in the Senate.

Obama said 'budgetary pressures' argue against extending tax cuts for the wealthiest. The administration forecasts this year's deficit will hit a record $1.47 trillion and $1.41 trillion next year.