The White House says in a new report that failing to extend the Bush era tax cuts could consumer spending by $200 billion next year, including reducing auto and parts sales by $7 billion.
The Obama administration wants Congress to extend the tax cuts to 98 percent of Americans who make less than $250,000 a year and the 97 percent of small businesses that earn less than $250,000 a year.
The administration says a typical middle-class family of four would see its taxes rise by $2,200 without a tax-cut extension.
Overall, the higher taxes would cut consumer spending by $200 billion. Consumer spending accounts for 70 percent of U.S. economic activity. Americans spend about $5 trillion annually on goods and services.