Middle class families, Obama said, "work hard and don't ask for much" but do expect "that their hard work is going to pay off."
Obama and Democrats want to extend tax rate cuts for income of $250,000 or less -- enacted during President George W. Bush's administration -- while allowing tax cuts on income over that amount to expire and return to the rates in effect during President Bill Clinton's tenure. Republicans want to extend the lower tax rates on all income.
Obama said he was glad to see the Senate "come together and extend" tax cuts on the first $250,000 of every family's income. Under the Senate bill, 98 percent of Americans and 97 percent of small businesses won't see their income taxes go up "a single dime" next year.
"And that's why it's so disappointing that, so far, at least, House Republicans have refused to follow the Senate's example and do the same thing," said Obama, surrounded by several middle class taxpayers.
"On Wednesday, they [the House] voted to hold these middle class tax cuts hostage unless we also spend a trillion dollars over the next decade on tax breaks for the wealthiest 2 percent of Americans," Obama said. "In fact, it's a little worse than that, because their plan would actually raise taxes on 25 million hard-working American families by about a thousand dollars each. ... Those are their priorities."
Citing an independent study, Obama said one Republican-backed tax plan "would give more tax cuts to millionaires and billionaires, and they'd pay for those tax cuts by raising taxes on the middle class, an average tax hike of more than $2,000 for families with children."
"I just think we've got our priorities skewed if the notion is that we give tax breaks to folks who don't need them and to help pay for that we tax folks who are already struggling to get by," Obama said. "That's not how you grow an economy. You grow an economy from the middle out and from the bottom up. And the kind of approach that the House Republicans are talking about is bad for our families and it's bad for our economy."
While Democrats and Republicans may disagree on whether tax breaks on income above $250,000 should be extended, "we say we all agree on extending tax cuts for middle-class families," Obama said. "The House says it agrees, the Senate has already shown that it agrees, and I certainly agree."
He urged Congress to "at least work on what we agree on."
"If Congress sends me a clean bill extending the tax cuts on the first $250,000 of every family's income I will sign it right away," Obama said, noting that no one's income taxes would go up on the first $250,000, regardless of how much money they make.
"There's no reason to wait. There's no reason to make families and small businesses anxious just so one party can score political points," Obama said. "Let's go ahead and give them that guarantee now that their taxes won't go up next year."
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