tangle of tax increases and deep federal spending cuts threatens to push the economy back into recession. A key component is what to do about income tax cuts pushed through a decade ago under Republican President George W. Bush.
Obama wants these low tax rates to be extended for 98 percent of Americans, but allowed to expire for the wealthiest 2 percent. Republicans want to extend the low rates for all.
Both sides agree more government revenue is needed to lower the budget deficit, but Republican leaders have said their party will not consider tax rate increases to accomplish that. Instead, they favor tax reform and tax cuts, saying these steps would spur the economy and boost government tax revenues.