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US Political Parties Draw Battle Line on Tax Cuts

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As lawmakers return to Capitol Hill from the August recess, a major showdown is shaping up between the President and Republican leaders on the issue of tax cuts - specifically, who should get them.  President Barack Obama favors extending Bush era tax cuts only for middle income Americans while Republicans are adamant that everyone should receive them, including the wealthiest Americans.  With crucial mid-term elections approaching, both sides are drawing battle lines in the sand. 

President Obama chose an unusual setting Monday to discuss the economy - the backyard of a middle class home in Northern Virginia.  But his message was the same:  

Republican leaders are blocking tax cuts for the majority of Americans, unless the nation's top earners get the same break.

"We're still in this wrestling match with John Boehner and Mitch McConnell about the last two or three percent," said President Obama.

Tax cuts passed under the previous administration are set to expire at the end of this year.  

The president wants to extend those tax cuts to families earning less than $250,000 a year but not for those earning more.

Republicans appeared ready to concede after House minority leader John Boehner said this on CBS News:

"If the only option I have is to vote for those at 250,000 and below, of course I'm going to do that," said John Boehner.

Boehner quickly found himself alone.  Senate Republican leader Mitch McConnell accused Democrats of driving a wedge between low and high income Americans.

"Now they want to drive another nail in the coffin - a massive tax hike on the very people who will dig us out of this recession by expanding their businesses and creating jobs," said Mitch McConnell.

But Democrats say the Republican proposal would add another $700 billion to the deficit over the next 10 years - something Democratic Senator Richard Durbin says the country cannot afford.

"He wants the millionaires to receive a $100,000 tax cut, a tax cut most have not asked for and many do not need," said Richard Durbin.

The president has urged lawmakers to approve tax cuts for middle-income Americans as soon as possible.  

But to do that, he has to convince members of his own party, especially conservative Democrats like Congressman Gerry Connelly.

"Given the fragility of the economy, all of the Bush tax cuts should be extended temporarily," said Gerry Connelly.

The issue could prove to be a major test of the president's leadership.  Recent polls show voter disatisfaction over high unemployment and the slow pace of recovery could give the Republicans the votes they need to strip Democrats of their congressional majority in November.

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