The New York Times reports today that President Obama plans to “set a goal this week to cut the annual deficit at least in half by the end of his term,” in large part through withdrawing from Iraq and raising taxes on the wealthy. Obama, however, will not immediately repeal the Bush tax cuts, instead letting them expire on their own in 2010:
Mr. Obama will also call for letting the Bush tax cuts on income, dividends and capital gains lapse after 2010 for individuals who make more than $250,000 a year. But while the top rate for income would rise to 39.6 percent, the top rate for capital gains and dividends would be 20 percent.
As a candidate, Mr. Obama called for immediately repealing those tax cuts. He decided instead to keep them in place through 2010, as scheduled, reflecting the widespread belief that raising taxes further depresses economic activity.
House Speaker Nancy Pelosi (D-CA) said in January that she was “urging” Obama to immediately repeal the Bush tax cuts, which she said were “the biggest contributor to the budget deficit.”