Obama says raise revenue; Boehner says lower spending

Countering President Obama’s call for tax rates to return to their past levels, House Minority Leader John A. Boehner said Wednesday morning that Congress should strike a bipartisan deal to lower spending to what it was in 2008.

Mr. Boehner, an Ohio Republican, said the economy is shaky because there’s too much uncertainty, and said reducing spending and promising to continue all the Bush-era tax cuts will help settle both jumpy consumers and wary small businesses.

“Why don’t we pass a bill this month at 2008 spending levels — before the TARP, before the bailout, before the stimulus — and let’s put some certainty in the economy,” he said on ABC’s “Good Morning America” program.

It is the latest move in a long-range, back-and-forth between Mr. Boehner and Mr. Obama, who are laying out competing economic visions for their parties heading into November’s elections. On Wednesday Mr. Obama will deliver a speech in Cleveland, specifically countering a speech Mr. Boehner gave there recently.

The New York Times reported that Mr. Obama will insist that the Bush tax cuts for the highest-income earners be allowed to expire at the end of this year — drawing a bright line between his party and Republicans who say the resulting increases would hurt small businesses.

The administration argues that wealthy taxpayers aren’t going to be stimulating the economy with that money but the federal government needs it to fund its own operations. Mr. Obama says he does want Congress to extend the Bush tax breaks for most Americans, though — families with incomes less than $250,000, and individuals who make less than $200,000.

Both sides are implicitly acknowledging the momentous power of the deficit, which already stands at nearly $1.3 trillion with one month left to go in the fiscal year and which has lawmakers in both parties balking at new government programs.

The tax fight, in particular, is likely to dominate the legislative schedule when Congress returns next week.

Countering the administration’s argument that the government needs the revenue, Mr. Boehner said Wednesday that the fiscal problem is on the spending side, not taxes.

He said returning spending to 2008 levels could save $100 billion this year.