President Obama will argue Friday that immediate renewal of lower Bush-era tax rates for the middle-class could prevent a “hit to consumer spending” during the holidays, as he visits a Montgomery County toy factory, according to a White House official.
The campaign-style stop is part of a stepped-up effort designed to pressure Republicans, who control the House and have blocking power in the Senate, to bend to the president’s will in negotiations over a budget deal to avoid the fiscal cliff. If the two sides don’t agree on a deficit-reduction plan by Dec. 31, the income tax cuts of 2001 and 2003 will expire and automatic budget cuts will begin.
That’s the cliff, which experts say would have a recessionary effect on the economy.
Obama wants to allow taxes to go up on those making more than $250,000 a year while renewing the lower rates for those under that threshold. Republicans want to keep all the rates from increasing, arguing a fragile economic recovery is no time to raise the tax burden.
By focusing relentlessly on taxes, Obama has thrown the GOP on the defensive. But Republicans are pointing out that the president has yet to detail any real spending cuts to round out what he has called his “balanced” approach to deficit reduction.
In particular, they say that in exchange for any concessions on taxes, Obama must support restraints on the cost of Medicare, Social Security and Medicaid, the federal government’s biggest and fastest-growing programs.
“The Democrats have yet to get serious about real spending cuts,” House Speaker John Boehner said Thursday. “No substantive progress has been made…over the last two weeks.”

Boehner was speaking after the White House presented a proposal to him that relies on $1.6 trillion in tax revenue over 10 years, few details on spending cuts – and millions in more stimulus spending.

The president is visiting the Rodon Group in Hatfield, Pa. It is the sole U.S. manufacturer of K’Nex brand construction toys and also makes Tinkertoy products and Lincoln Logs. Double message bonus for the White House: Rodon brought 95 percent of its packaging and manufacturing back from China over the past few years, leading to a 25 percent increase in the size of its workforce, to 150.
“As we move into the holiday season, Democrats and Republicans should come together to renew middle class tax cuts so families have more certainty at this critical time for our economy,” said a White House official previewing the visit.
Expiration of the tax cuts for those making under $250,000 would increase next year’s tax bill on a median-income Pennsylvania family of four by $2,200, the administration calculates. (Median income in the state is $80,400.)