Are middle class tax increases on the way?

In 1988, then presidential candidate George H. W. Bush uttered the now (in)famous phrase, "Read my lips: no new taxes" at the Republican National Convention. The pledge was considered to be one of the keys to Bush's success in winning the presidency that year. Two years later, the pledge came back to haunt President Bush when he raised taxes as part of a budget agreement; it is considered one of the reasons for Bush's failure to win a second term in 1992. Making promises, something that politicians do all of the time, is tricky business, especially at the top.

President Obama is hoping that history isn't bound to repeat itself. Twenty years after Bush's speech, then presidential candidate Barack Obama pledged not to raise taxes on the middle class. However, as spending continues to skyrocket and tax revenues plummet, there is considerable concern among Democrats in Congress that it might not be possible to keep that promise.

This week, House Majority Leader Steny Hoyer (D-Md.) became the first high-ranking Democrat in Congress to signal that the party might not permanently extend President George W. Bush-era tax cuts for the middle class. Hoyer wouldn't go so far as to say that tax increases were on the table but suggested that any extension of middle class tax breaks would likely be short term, perhaps as short as one year. Those tax breaks were passed during President Bush's first term and have not been renewed since; they are scheduled to expire at the end of 2010.