Presidential Politics 2012 President Obama tries to move debate away from economy White House wants to shift attention to extending tax cuts for the middle class

By Steven R. Hurst

Associated Press

WASHINGTON (AP) -- President Barack Obama sought Monday to change the campaign debate with Republican challenger Mitt Romney, trying to shift the discussion from high unemployment and a tepid economic growth to extending tax cuts for the middle class Americans.

At the same time, Obama called for allowing a rise in taxes for what he said were the 2 percent of Americans earning more than $250,000 a year.

As he attempts to diminish voter anxiety over stagnant unemployment numbers -- now standing at 8.2 percent -- and limp economic recovery, Obama spoke at the White House in an opening of his new campaign pitch to the middle class.

He said continuing tax cuts for high-income earners was a major driver of the skyrocketing U.S. federal budget deficit.

But extending the tax cuts for the middle class, the president said, "would be an incredible drag on the economy."

The White House is again raising the tax issue with full knowledge that the Republican-controlled House of Representatives will not accept such a move unless it also includes extending tax cuts for high-income earners.

That is a symptom of the legislative and political gridlock consuming Washington in advance of the November elections. Another example is the plan in the House to vote to remove Obama's health care overhaul from the books. That will be blocked by the Democratic-controlled Senate and would be vetoed by Obama even should it pass both houses in Congress.

A one-year across-the-board tax cut -- that would extend the lower rates instituted under former President George W. Bush -- expires at the end of the year.

The White House official said Obama will call for yet another one-year extension of tax cuts but only for people making less than $250,000 a year.

The Romney campaign responded quickly.

"President Obama's announcement this morning will mean a tax increase for millions of families, job creators, and small businesses," Romney spokeswoman Andrea Saul said in a statement.

An official at Obama's re-election campaign says it will promote the president's economic agenda in a series of events this week in battleground states, including New Hampshire, Colorado and Nevada. The officials spoke on condition of anonymity in order to preview Obama's announcement.

Meanwhile, Obama's campaign and the Democratic party raised $71 million in June, well below the $106 million hauled in by Romney and the Republican party during the same period. It was the second straight month that Romney has raised more money than Obama.

Obama officials have warned the fundraising deficit could harm the president's chances of winning re-election.

On Sunday, Romney privately raised millions of dollars from New York's elite, while Democrats were launching coordinated attacks against the presumptive Republican presidential contender, intensifying calls for him to explain his offshore bank accounts and release several years of tax returns.

The line of attack, dismissed by the Romney campaign as an "unfounded character assault," follows new reports that raise questions about Romney's personal wealth, which could exceed $250 million.

Obama's re-election campaign is expected to push the strategy throughout the coming week, underscoring their desire to portray Romney as disconnected from the middle-class voters he needs to win the presidency.

Romney may have unintentionally played into the Obama theme.

Republican donors driving Mercedes, Bentleys -- and in one case a red 2013 Ferrari Spider -- crowded into a series of closed-door Romney fundraisers in the Hamptons, New York's exclusive string of waterfront communities on Long Island's South Shore.

Wall Street bankers and brokerage house chiefs, among others, make the area their weekend playground. Romney's Hamptons swing follows a weeklong family vacation at his lakeside vacation home in New Hampshire.

Voters are split on whether they trust Romney or Obama more to run the U.S. economy, but a majority says that Obama better understands their concerns. The Hamptons crowd, however, saw things differently.

Romney's day concluded at the Southampton estate of billionaire industrialist David Koch, where donors were asked to give $50,000 per person or $75,000 per couple.

Romney would be among the nation's richest presidents if elected. He made his fortune at Bain Capital, a Boston-based private equity firm that has become a key point of contention in his White House bid. He hasn't drawn a regular paycheck in more than a decade, however, and has instead lived off a series of investments.

Romney has refused to release more than two years of tax returns that would outline those investments, breaking from a precedent set by his father, former Michigan Gov. George Romney, who released 12 years of his tax returns when he sought the presidency a generation ago.

The new push by Obama and his allies comes two days after the release of a lackluster jobs report that said the U.S. unemployment rate was stuck at 8.2 percent. Romney has been largely focused on the economy throughout his campaign, an issue that voters overwhelmingly report will be on the top of their minds come Election Day in November.

Published: Tue, Jul 10, 2012

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