No Income Tax Cuts for Small Business Owners? Obama to Outline Goals in Speech

President Obama speaks on the economy at the Milwaukee Laborfest in Milwaukee Sept. 6. (AP Photo)

President Obama is prepared to announce his opposition to extending tax cuts for the wealthy during an economic speech in Cleveland Wednesday, but White House officials told Fox News not to expect the president to draw a line in the sand.

The New York Times reported Wednesday that during his speech, Obama will affirm that he is against any type of deal extending high-income tax cuts beyond this year. But White House officials told Fox News that the Times article is overwritten.

It waved off suggestions of a definitive statement, but did not outright deny the president's intention to let the Bush-era tax cuts for the wealthiest Americans expire.

The Washington Post also reported Wednesday that Obama would not extend the tax cuts for incomes exceeding $250,000 -- a tax bracket that fits many small business owners.

White House senior adviser David Axelrod told Fox News that the president isn't supporting tax cuts for high-income earners because they "aren't asking for them, don't need them and have the money to spend. We have to focus on the priority, which is getting the middle class moving again."

A senior administration official said the president will endorse extending expiring tax cuts only for the middle class.

"No economist has argued" that extending tax cuts for wealthier earners "has a great 'bang for the buck' for the economy," the official said.

Further, increasing tax revenues from the wealthier taxpayers to reduce deficits "is a much better use of that money. That is a 'values' statement," the official said, arguing that 97 percent of small businesses "aren't touched by this, and the 3 percent of them that are largely lawyers and lobbyists and financiers … the Republicans want to masquerade them as small businesses."

House Minority Leader John Boehner said he doesn't understand why the president wouldn't allow a two-year moratorium on tax increases.

"What that will do is help small businesses who have no clue what the coming tax rates are going to be, gives them some certainty," Boehner, R-Ohio, told ABC's "Good Morning America. "And if we're able to do this together, I think we'll show the American people that we understand what's going on in the country and we'll be able to get our economy moving again, and get jobs growing in America."

The president's speech is intended to introduce a trio of proposals made to spur economic growth through tax cuts and investment. But the administration refuses to call the measures a second stimulus package.

Obama's three proposals will include a $50 billion infrastructure investment, a permanent expansion of research and development tax credits for companies and new tax breaks that would allow businesses to write off 100 percent of their new capital investments through 2011.

While the plans are designed to increase consumer and business confidence, most companies prefer across-the-board cuts over targeted ones; more expansive breaks allow businesses to decide how to spend their "investment" money.

Obama's former budget chief suggested Wednesday that a short-term, across the board extension to the tax cuts may be necessary.

In a debut op-ed piece also in The New York Times, the former director of the Office of Management and Budget Peter Orzag said a tax cut compromise with Republicans in Congress might be the best option in the face of the stagnate economy.

White House Press Secretary Robert Gibbs defended the president's position on the tax cuts Tuesday.

“The president's viewpoint is that we cannot afford to extend the tax cuts for those making more than $250,000 a year," Gibbs said. "Most of the spending for extending those tax cuts comes from … incomes that surpass $1 million. Roughly, for a millionaire, that's $100,000 tax cut. I don't think the president believes that we are a $100,000 tax cut from a millionaire away from an economy that works for families that are making $40,000 a year."

Democrats face lower poll numbers, internal divisions and the potential to lose the majority in the House as they approach the midterm elections.

The Times reported that some Democrats hope that the president's remarks would help to "rally wavering lawmakers who…feel increasingly vulnerable to Republican attacks."

The office of Senate Republican leader Mitch McConnell released a statement Wednesday saying the president's position is job killing.

"As you may have seen this in the New York Times, President Obama is not only rejecting compromise, he's insisting on a tax hike next year for Americans across the country, including hundreds of thousands of small businesses," a spokesman for the Kentucky senator said. "This is an odd position giving the strong bipartisan opposition to tax hikes in Congress, leaving the President in a dwindling group of politicians who still think it’s a good idea to raise taxes in the middle of a recession.”