Obama may accept tax breaks for rich

WASHINGTON - With tax breaks for millions of Americans set to expire Dec. 31, President Barack Obama has opened the door to a compromise with Republicans, signaling a new willingness to accept tax breaks for the wealthy to avoid immediate tax increases across the board.

But as lawmakers head back to town next week for their first battle since this month's congressional elections, no one is sure how far Obama is willing to go.

In recent days, the White House has appeared to vacillate on the expiring tax cuts, swerving from a humble tone of capitulation back to one of defiance.

On Wednesday, White House senior adviser David Axelrod seemed to suggest that Obama was poised to acquiesce to GOP demands to extend all the tax cuts in tandem, telling the Huffington Post, "We have to deal with the world as we find it."

On Friday, Obama pushed back, telling reporters with him in South Korea that "that is the wrong interpretation."

"Here's the right interpretation: I want to make sure that taxes don't go up for middle-class families starting on January 1," Obama said. "That's my Number 1 priority for those families and for our economy."

Obama's remarks moved the debate back to square one of the post-election era: He is willing to break his campaign promise to eliminate tax breaks that benefit the wealthy, administration officials said, but only for a year or two or three. He wants to "decouple" the cuts for the upper-brackets from the middle-class cuts by extending the two sets of provisions for different periods of time. But he does not want to play a game of legislative chicken that risks letting all the cuts expire.

The problem is that Republicans vehemently oppose decoupling, calling it a non-starter that would lead inexorably to higher taxes on the wealthy. So across Washington, lawmakers, anti-tax mavens and liberal activists are wondering: What will Obama do when push comes to shove?

by Lori Montgomery Washington Post Nov. 13, 2010 12:00 AM



Obama may accept tax breaks for rich