Many say we have to cave in to the Republicans because withholding rates will go up on the middle class on Jan 1. This can be avoided by a Presidential Directive to the Secretary of the Treasury. There is a precedent for this. In 1992 President Bush issued a Directive to lower withholding rates (without a corresponding tax change or any legislation) to stimulate the economy.
In 1992, the income tax withholding tables were adjusted so that withholding was reduced. A typical worker received an extra $28.80 in take-home pay per month in March through December 1992, to be offset by a lower tax refund in 1993. The change in withholding amounted to 0.5 percent of GDP. President Bush, who proposed this change in his State of the Union address, intended that it provide a temporary stimulus to demand.
Therefore there is way to rebut those who say if we don’t cave-in and pass the tax cuts for the rich, everyone else will immediately face higher withholding on Jan 1st. Pres. Obama can issue an Executive Order to maintain tax withholding rates for those with income under $250,000 . He can even cite President Bush for the precedent.
The Strategy:
1) Refuse to pass anything but the Middle Class Tax cuts.
2) President Obama can issue a Directive to the Secretary of the Treasury to maintain existing tax withholding rates only for those with income under $250,000..
3) Fight everyday until we force Republicans to capitulate on Middle Class tax cuts only.
Would this work?

