(Bloomberg) -- President Barack Obama will agree to Republican demands that Bush-era tax policies benefiting high-income Americans be extended, his top advisor said in an interview with the Huffington Post.
David Axelrod, the advisor, said that will be the only way to ensure lower tax rates for middle-income Americans also are continued. Unless Congress acts, the tax cuts enacted in 2001 and 2003 expire on December 31.
"We have to deal with the world as we find it," Axelrod told the Huffington Post during a 90-minute Oval Office interview. "The world of what it takes to get this done."
Axelrod said Obama didn't want to "trade away security for the middle class" to continue making the point that the country can't afford to also extend tax cuts for high-income Americans, defined by Obama as individuals making more than $200,000 and couples earning more than $250,000.
"The president has been clear that extending tax cuts for middle-class families is his top priority and he is open to compromise to get that done," White House spokesman Amy Brundage said today. "He has also expressed concern about the cost of making the highest-income tax cuts permanent and is looking forward to discussing this and other issues with bipartisan congressional leaders next week."
Obama said last week he would negotiate on the tax cuts after Republicans took control of the House in midterm elections and gained six seats in the Senate.
Ohio Representative John Boehner, a Republican in line to be House Speaker in the next Congress, yesterday said his party would continue to insist on extending the Bush-era tax cuts for all income levels. An across-the-board extension would cost the government about $5 trillion in foregone revenue and interest cost on the debt, the Congressional Research Service estimated last month.