Obama's Middle Class Tax Cut May Not Survive Budget

President Obama's budget chief hinted Wednesday that the president's signature campaign issue -- a middle-class tax cut -- will not likely survive a budget battle with Democrats on Capitol Hill.

On a conference call with reporters in advance of the president's trip to the Hill to speak before the Senate Democratic caucus, Office of Management and Budget Director Peter Orszag indicated that, while 98 percent of the budget mark-ups in the House and Senate are on par with the administration's budget blueprint, some campaign trail promises, like middle-class tax cuts, may get left on the cutting room floor.

The administration had tied the revenue raised from its environmental "cap-and-trade" proposal to the middle-class tax cuts -- known as the "Making Work Pay" tax credit for families -- both of which have been brought up as possibilities to be scrapped from the Senate and House budget resolution.

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Obama's middle-class tax cut is locked in place for the next two years as part of the stimulus package he signed into law last month, but Orszag told reporters today that the White House will have to use those two years to figure out how to keep that tax cut in place for middle-class families beyond 2010.

Obama took his budget campaign to the Hill today to discuss his $3.6 trillion budget face to face with some skeptical Democrats, a day after he addressed the nation in a prime-time news conference.

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Democratic leaders emerged from the 45-minute lunch expressing confidence that they will be able to work with the White House on provisions the president wants included in the budget.

The Senate will "protect President Obama's priorities -- education, energy, health care, middle-class tax relief and cut the deficit in half," said Senate Majority Leader Harry Reid, D-Nev.

"We have attempted to preserve -- and I think have preserved -- the president's key priorities," said Kent Conrad, D-N.D., the chairman of the Senate Budget Committee "All those are possible to move forward in the budget resolution I've written."

Reid said the budget will be passed next week.

Republicans on Capitol Hill have blasted the president's budget as too expensive and irresponsible because of the $7 trillion to $9.3 trillion national debt his proposals are projected to create during the next 10 years.

In his news conference yesterday, Obama had some strong words for his Republican critics.

"I suspect that some of those Republican critics have a short memory, because as I recall, I'm inheriting a $1.3 trillion deficit, annual deficit, from them," he said.

He challenged them to draft an alternate budget instead of simply criticizing his version. On Wednesday, Republicans responded to that challenge.

"Our nation is beginning to understand that the president has proposed the most fiscally irresponsible budget in the history of our nation," Rep. Mike Pence, R-Ind., said on the House floor. "In the coming hours, Republicans will unveil a better solution, to pass a budget built on fiscal responsibility and the principles of growth."

House Minority Whip Eric Cantor, R-Va., criticized Obama's budget for not having a clear focus and echoed Pence's statement that House Republicans will devise their own budget.

"The president knows that Republicans will have a budget plan that will be considered by the House, one that will set clear priorities, and focus directly on growing the economy and reducing health care costs," Cantor said in a written statement.

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