White House Stands by Call for Tax Hike on Wealthy

The White House continued to push Sunday for Congress to let the Bush tax cuts expire for the wealthiest Americans, teeing up a lame-duck standoff over the issue in Washington once lawmakers return from the campaign trail.

David Axelrod, the president's senior adviser, said Sunday that the Obama administration still wants the tax cuts extended for middle-class families making up to $250,000.

"That would be stimulative, because people who need money in their pocket to spend and pay for the things that they need to live would have more money in their pocket," Axelrod said in an interview.

But he continued to argue that extending the cuts for everybody, including the upper-income brackets, would not be worth the cost and would not stimulate the economy.

"The notion that we borrow $700 billion for the next ten years from China or some other country in order to pay for tax cuts for millionaires and billionaires doesn't make sense. This is part of how we got in trouble in the first place," Axelrod said on CNN's "State of the Union."

Congress adjourned for the midterm election without a vote on the Bush tax cuts, which are set to expire at the end of the year unless Congress acts. Republicans and some Democrats are pushing for a full-scale extension, while the Obama administration and top Democratic leaders are pushing for a partial extension.

The White House persistently accuses Republicans of holding the middle class "hostage" by insisting on an across-the-board extension.

But Sen. John Cornyn, R-Texas, said Sunday that Democrats are to blame for the uncertainty injected into the business world by not tackling the issue before the election.

"I was shocked that Harry Reid, who controls the agenda on the Senate floor, and Nancy Pelosi in the House did not tee this issue up before the election," the chairman of the National Republican Senatorial Committee told "Fox News Sunday." "So by the end of this year, the American people are looking at the single largest tax increase in American history, including on a lot of small businesses that declare their business income on an individual tax return.

"There couldn't be a worse message for the job creators in America during a time when unemployment is so high than the uncertainty over what future taxes are going to be. So I think, unfortunately ... it's really been a mishandling of the agenda," Cornyn said.

Sen. Claire McCaskill, D-Mo., speaking alongside Cornyn, said she would be "open to compromise" on the upper-income tax rates once the Senate returns. But she said Democrats have already cut taxes by $300 billion and questioned whether Republicans were "serious" about closing the deficit.