The HillTube

Cornyn: Obama needs to show leadership on extending tax rates

President Obama and Democrats are relying on "gimmicks" and "political show votes" instead of tackling serious tax issues, Sen. John Cornyn (Texas) said in the weekly Republican address.

"Make no mistake: every single working American will see his or her taxes go up on January 1 absent action," Cornyn said Saturday.

ADVERTISEMENT
At the end of the year, the Bush-era tax rates are scheduled to expire, hiking rates for the middle class as well as top income earners. At the same time, automatic spending cuts will kick in as a result of the debt-limit deal struck last summer.

The nonpartisan Congressional Budget Office (CBO) said in May that unless lawmakers act to prevent scheduled tax increases and spending cuts at the end of the year, a recession will likely result in early 2013.

"The good news is that we now have an emerging bipartisan consensus on tax reform," Cornyn said. "The bad news is that President Obama is missing in action. The bipartisan consensus is simple: We should lower the rates and broaden the base."

House Republicans are planning a July vote to extend all the Bush-era tax rates, but Democrats want to extend only for the middle class.

House Speaker John Boehner (R-Ohio) on Thursday rejected a proposal by Minority Leader Nancy Pelosi (D-Calif.) to vote now on extending current tax rates for Americans earning less than $1 million a year.

Cornyn said the looming tax debate is creating economic uncertainty.

"The resulting uncertainty over federal taxes has been deeply harmful to our economic recovery," Cornyn said.

"But we won't get real tax reform until we get real presidential leadership. The time for action is now. The longer that President Obama dithers, the greater the harm to our economy."