Washington ? Amid a contentious midterm election campaign, one of the sharpest divisions is over the expiration this year of Bush-era tax cuts, but almost everyone agrees on one point — doing nothing is not an option.

If Congress fails to act, taxes on most Americans would go up next year — adding $1,541 to the average household payment, by one estimate.

Taking that money, a total of $135 billion, out of the pockets of consumers and small businesses could be a devastating blow to the fragile economy.

President Barack Obama wants to avoid that. He proposes to continue the tax cuts for just about everybody. But he wants to let them expire for the most wealthy — families making more than $250,000 a year and individuals making more than $200,000 — to reduce the exploding budget deficit and fulfill a major campaign promise.

On Wednesday, Treasury Secretary Timothy F. Geithner hammered on the projected costs of continuing the tax cuts for top earners as the administration ramped up for a bruising fight.

“Borrowing to finance tax cuts for the top 2 percent would be a $700 billion fiscal mistake,” Geithner said in a Washington speech. “It’s not the prescription the economy needs right now, and the country can’t afford it.”

But Republicans appear united in wanting to extend all the tax cuts, providing a difficult obstacle in the Senate as it prepares to deal with the issue next month. And they’re being joined by some moderate Democrats, who worry that even Obama’s limited tax increase could derail the weak economic recovery.

“I think we’re at a point in our economic recovery that anything that would adversely affect it, we ought to avoid,” said Sen. Ben Nelson, D-Neb., one of at least three moderates in the Senate who don’t want to see a tax increase next year, even one limited to the most wealthy.

The debate sets the stage for a high-stakes game of chicken, with the future of Americans’ wallets — and the economy — in the balance.

“If they don’t act, that would be a serious mistake and significantly raise the odds that the economy would unravel back into a recession,” said Mark Zandi, chief economist at Moody’s Analytics.

Every American who pays federal income taxes would see them increase if the tax cuts expire, according to the nonpartisan Tax Foundation. A typical middle-class family with a median income of $63,366 would pay $4,964 in taxes next year if the cuts expire, well above the $3,423 tax it would pay if cuts were extended.