The Tax Policy Center has unveiled a Tax Calculator that helps taxpayers better understand how their paychecks could be affected by changes in tax policy.

After being pressed on the issue, President Obama on Thursday refused to threaten to veto a bill that would extend all the tax cuts enacted under President George W. Bush.

Instead, the president reiterated his concern that extending the tax cuts for the wealthy would drive up the deficit and do little to help the economic recovery.

Geithner blamed politics in Congress for slowing down the administration's legislative proposals to boost the economy.

President Obama on Wednesday personally called for phasing out tax cuts for the rich.

YUAN TENSIONS FLARE

A day after President Obama rolled out his plan to battle back an economic slowdown, the financial wires remind us it’s not all about the U.S. Congress is gearing up for post-recess action on the yuan, blaming its low value for boosting Chinese exports at the expense of the U.S. economy.

Reuters: “Senate, House eye action on China currency” http://bit.ly/9tStwa

“China said in June that it would permit market forces greater sway in setting the yuan's value, yet it has only appreciated about 0.6 percent since then.

Pressure is building in both the House of Representatives and Senate over the issue, creating some nervousness among analysts about the risk that legislative proposals may stir more trade tensions.”

The story notes the possible moves:

• Sens. Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) said they have the votes for China currency bill.
• House Ways and Means has set Sept. 15 hearing on the yuan.
• Senate Banking Committee is planning a Sept. 16 hearing with Treasury Secretary Timothy Geithner, the wire’s sources said.

“The hearings would occur when frustration at persistently high U.S. unemployment at nearly 10 percent is a growing threat to Democrats' chances at retaining control of Congress in November and is a goad to lawmakers seeking a target for soaring U.S. deficits.”

Bloomberg on why everyone’s mad: “China trade surplus probably exceeded $20 billion, stoking Yuan tension.” http://bit.ly/cuwq9P

“Exports probably exceeded imports by $26.9 billion, compared with $15.7 billion in the same month a year earlier, according to the median of 34 forecasts in a Bloomberg News survey... Premier Wen Jiabao’s government limited the yuan’s gain to less than 1 percent versus the dollar since a June pledge for greater flexibility... 'Frankly they haven’t let the currency move very much so far,’ U.S. Treasury Secretary Timothy F. Geithner said yesterday in an interview on Bloomberg Television. ‘They know they’re just at the beginning of that process and I think we’d like to see them move more quickly.’”

Meanwhile in Beijing: Summers and Donilon get access to China President Hu and Premier Wen. http://bit.ly/9luxF3

SecState Clinton said Wednesday the debt is a national security threat. http://bit.ly/9TXqJM

The U.S. dropped from being the second most-competitive economy to the fourth in the World Economic Forum’s latest rankings. Bloomberg: “A budget shortfall of more than $1 trillion and public distrust of politicians were among the weaknesses in the world’s largest economy.” http://bit.ly/bEaTaJ

The top three slots went to Switzerland, Sweden and Singapore.

OBAMA SPEECH POST-GAME

WaPo hed: “Obama plan gets cool reception.” http://bit.ly/aXQNCn

“...Obama's proposal for $180 billion in fresh infrastructure spending and business tax breaks is not satisfying many of the groups he needs on his side - not lawmakers on Capital Hill who are leery of raising the deficit by spending more, not economists who say the plan is too modest to create many jobs, and not business groups that say the tax benefits come with too many strings attached.”

Those quoted in opposition: Sen. Michael Bennet (D-Colo.), the Business Roundtable and Senate Republicans. Big companies, such as Intel and GE, have yet to weigh in.

NYT edit board says Obama took too long to engage on the economy and John Boehner, but it’s glad he finally did: “Mr. Obama’s speeches were a robust effort by the president to rally Democrats for the election. It has been a long time coming. And we wish that Democratic leaders in Congress could show the same clear thinking and the same willingness to go head to head with the Republicans.” http://nyti.ms/c7eWz2

Boehner’s policy response: two-year tax rate freeze, return to 2008 spending levels: http://bit.ly/c2ViSz

BUSH TAX CUTS UPDATE

Now that the president has stood by his call for extending only the middle-class Bush-era tax cuts, Peter Orszag clarifies his stance in an interview with Greg Sargent. “[Orszag] only favors temporarily extending the tax cuts for the rich reluctantly, and only if it's the sole way of obtaining a deal that would end them altogether.”  http://bit.ly/bx2TKo

WSJ hed: "Tax Cuts Dividing Democrats" http://bit.ly/ck40wM

But further down in the story... “Democratic leaders say the majority of their members still favor letting the upper-income tax cuts expire and believe the issue cuts in their favor in a time of populist fervor. On a conference call of House Democrats this week, there was broad consensus behind the idea, according to a person on the call.”

Sen. Olympia Snowe shows GOP less conflicted: the Maine centrist opposes Obama plan. In prepared remarks, the Maine Republican urged "the president and Democratic congressional leaders to swiftly reject job-killing tax increases in these uncertain economic times, and allow a vote on legislation to extend all of the 2001 and 2003 tax relief set to expire on December 31." http://bit.ly/aznFWM

Finreg Story of the Day: Elizabeth Warren “slipped quietly” into WH for meeting with Obama. Warren is the left’s favored choice to head the newly created Bureau of Consumer Financial Protection. The president is also looking at others, including Assistant Treasury Secretary Michael Barr. WaPo: http://bit.ly/9mQhsx

Finreg affects more than Wall Street: Reform threatens Small Savers day care in NW Washington. “Small Savers parents - who include White House staffers, World Bankers, lobbyists, lawyers and journalists - have quickly become a lobbying juggernaut to save the small Washington institution under G Street.” WaPo: http://bit.ly/aenNtp

Economic Impact Story of the Day: NYT, A1. "Falling Rates Aid Debtors, But Hamper Savers"

“Households and corporations alike are refinancing their loans in droves to take advantage of interest rates that seem impossibly cheap. But those same low rates come with a flip side, driving down the income of retirees and others who live off their savings.” http://nyti.ms/cYz1q3

“Blue Chip economists cut U.S. growth forecast again” Economic growth for 2010 will be 2.7 percent, 0.2 points lower than the economists forecast last month. The 2011 forecast was downgraded 0.3 points to 2.5 percent. The unemployment rate is projected to be 9.6 percent at the end of this year and 9 percent at the end of 2011. Reuters: http://bit.ly/bHFQWz

Fed “beige book” report finds the economic recovery advancing unevenly. “... factories, farms and mines were all seeing ‘continued gains in demand and sales,’ while housing sales — and the related construction industry — slowed after the expiration of a federal tax credit that encouraged housing sales.” WSJ: http://bit.ly/bVt5ph

And yet: Job openings rise for first time since April. http://bit.ly/bYOkN6

Sen. Olympia Snowe (R-Maine) is opposed to the plan by President Obama and other Democratic leaders to only extend the tax cuts benefiting the middle class that were enacted under President George W. Bush. 

Consumer borrowing dropped in July for a sixth straight month as households shaved off more debt and reined in their use of credit cards. 

Borrowing fell by $3.6 billion compared with July following a revised $1 billion drop in June that was less than initially estimated, the Federal Reserve reported Wednesday. 

The Fed tracks credit card debt and non-revolving loans, such as auto loans. 

With a lack of job creation and continued economic uncertainty, consumers are opting to curtail their spending, save more and pay off their debt. 

Overall debt declined by 1.8 percent in July as revolving debt dropped by $4.4 billion or 6.3 percent, the Fed said today. Non-revolving debt increased by $758 million or 0.6 percent, the third straight monthly gain. 

The pharmaceutical, biotech and medical device industries stand to benefit from President Obama's proposal to expand the research and development tax credit, according to Wall Street analysts.

Obama is pressing Congress to expand the tax credit by about 20 percent and make it permanent. First introduced in 1981, the credit has been extended 13 times and expired eight times — most recently on Dec. 31, 2009.

"AdvaMed has long supported making the R&D tax credit permanent," said Brett Loper, senior executive vice president for government affairs for the Advanced Medical Technology Association. "We look forward to seeing the details of this new proposal and the other tax changes being discussed today to determine how they will affect America’s medical technology companies."

House Republican Whip Eric Cantor (Va.) slammed President Obama on Wednesday for what he said was a mischaracterization of congressional Republicans in the president's economic speech.

Cantor accused Obama of saying Republicans had not proposed specific cuts to federal spending, and asked the president to "clarify or withdraw" the remark.

"President Obama must have misspoken today, because I have personally sat across the table from him and suggested specific ways to cut spending," Cantor said. "Furthermore, House Republican Leader John Boehner and I urged President Obama to work with Republicans to cut spending by using his authority to send Congress a 'rescissions' package. In fact, we sent President Obama a letter twice pledging to work together with him on that effort. We still have not heard back — seven months later.

"It doesn’t end there," he added. "Through the YouCut program House Republicans have offered over $120 billion in spending cuts, only to be voted down by Democrats in the House. Finally, House Republicans Jeb Hensarling and Paul Ryan have introduced a 'Cut Spending Now' package of specific cuts that would save taxpayers more than $1.3 trillion.

The Hensarling/Ryan package included a $925 billion savings over 10 years if spending is held at 2008 levels. The plan also includes returning unused economic stimulus, saving $266 billion, saving $16 billion from the Troubled Asset Relief Program, reduce federal government employment and freeze salaries to save a combined $65 billion, adopt the line-item veto to save up to $23 billion and reform Fannie Mae and Freddie Mac for an estimated savings of $30 billion, according to estimates by the Congressional Budget Office. 

"President Obama is entitled to his opinion, but he’s not entitled to his own facts," Cantor went on, "and with that in mind I am asking him to either clarify or withdraw the accusation that he made earlier today.”

The president gave the speech in Cleveland.

--Vicki Needham contributed to this story.