Boehner's Tax Comments Spark War of Words

Sept 12, 2010 -- A war of words between the White House and House Minority Leader John Boehner erupted today over the ongoing debate on the extension of Bush-era tax cuts to the wealthy.

It began when Boehner said on CBS' "Face the Nation" that he would support extending the tax cuts for couples making less than $250,000 or individuals making less than $200,000 if there were no other option.

The White House then released a statement saying it supported Boehner's comments, but also expressing skepticism about his intentions.

"We welcome John Boehner's change in position and support for the middle class tax cuts," read White House spokesman Robert Gibbs' statement. "But time will tell if his actions will be anything but continued support for the failed policies that got us into this mess."

Boehner then responded to Gibbs in a statement released this evening:

"Raising taxes on any American, and especially small businesses, in a struggling economy is the exact wrong thing to do," he said. "There's a clear way forward, and that's for us to come together and pass legislation immediately that cuts spending to 2008 levels for the next year and stops all of the coming tax hikes by freezing all current tax rates for the next two years."

Boehner said his opinion is shared not only by a number of economists and fellow Republicans, but also by some of his Democratic colleagues.

On "Face the Nation" Boehner had signaled that he would vote for a bill to extend tax cuts to those who earn less than $200,000 per person or $250,000 per couple, even if it does not include a provision extending those tax cuts to wealthier Americans.

"If the only option I have is to vote for those at $250,000 and below, of course I'm going to do that," he said. "But I'm going to do everything I can to fight to make sure that we extend the current tax rates for all Americans."

This was quite a surprising admission from the top Republican. Democrats and Republicans have been torn on the issue, with many Democrats saying that letting the cuts on the rich expire will give the government $700 billion to cut the national deficit.

Republicans have said that extending the Bush era tax cuts to the wealthy will bolster small business job creation.

"Let me be clear to Mr. Boehner and everyone else," President Obama said Thursday. "We should not hold middle class tax cuts hostage any longer. We are ready, this week, to give tax cuts to every American making $250,000 or less."

He went on to say that letting the tax cuts for the rich expire will give the government $700 billion to reduce the national deficit.

Extending the cuts for all Americans will cost the government $3.7 trillion over 10 years.

"Borrowing $700 billion to extend tax cuts that average more than $100,000 a year to millionaires, and even billionaires, is the least effective bang for the buck we have," White House economic adviser Austan Goolsbee said.

But many believe that Boehner's statement is an attempt to put an end to the Democrats' story that Republicans are working against the majority of middle income Americans and blocking all of the Democrats' policies.

"Boehner's words were calculated strategically to deprive Obama of the ability to continue making false claims about Republicans holding middle class tax cuts hostage," a House GOP leadership source told ABC News' Jake Tapper.

The aide went on to say that Republicans stand firm in getting bipartisan support to freeze current tax rates for everyone.

It remains unclear if the Democrats have enough votes in the Senate to let the taxes on the wealthy expire. Some believe that Boehner's sudden and vocal willingness to compromise is an attempt to focus in on this division among the Democrats.

Obama himself has even shown hints of willingness to compromise. In an interview with George Stephanopoulos last week, the president refused to give a veto threat on a bill extending the Bush tax cuts to the top two tax brackets.

"There are a whole bunch better ways to spend the money," Obama said. "What I am saying is that if we are going to add to our deficit by $35 billion, $95 billion, $100 billion, $700 billion, if that's the Republican agenda, then I've got a whole bunch of better ways to spend that money."

Signs of a potential sea change on the Republican side of the debate came on Friday when retiring Republican Sen. George Voinovich said that he's had enough, and will vote with the president for small business tax cuts and loans. The feeling is that other Republicans could follow him in droves.

"As soon as somebody breaks, then everybody starts to rush. That's how the Senate has always worked, Republicans and Democrats," said Ryan Grim, Huffington Post senior congressional reporter.

"I'd say the chances are zero that those tax cuts get extended," he added.