Obama: Keep middle class from tax rise

Don’t wait for a ‘cliff’ deal, act now, he tells Congress

“The American people are watching what we do,” President Barack Obama said Wednesday after noting that “a clear majority of Americans” support his approach to taxes, spending and cutting the deficit.
“The American people are watching what we do,” President Barack Obama said Wednesday after noting that “a clear majority of Americans” support his approach to taxes, spending and cutting the deficit.

— President Barack Obama called again on Congress on Wednesday to extend Bushera tax cuts for all incomes under $250,000 and leave a broader restructuring of the tax code until next year, as he pressures Republicans to let tax rates rise for the highestearning Americans.

President Barack Obama says he believes a framework to cut the country's massive debt can be reached before Christmas.

Obama hopes to have fiscal deal by end of December

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Surrounding himself with supporters whom he presented as typical middle-class taxpayers, Obama said he hoped to resolve the tax and spending issues now confronting Washington by an end-of-the-year deadline. But he said lawmakers should not wait for such an agreement to pass legislation preserving current tax rates for 98 percent of Americans.

“My hope is to get this done before Christmas,” he said of an agreement to avert a “fiscal cliff” of deep spending cuts and hefty tax increases scheduled to take place automatically with the new year. “But the place where we already have, in theory at least, complete agreement right now is on middle-class taxes.”

He said such an approach “would give us more time next year to work together on a comprehensive plan to bring down our deficits” and “streamline our tax system.”

Obama invoked his victory in the Nov. 6 election, saying that “a clear majority of Americans” support his approach to taxes, spending and cutting the deficit.

“The American people are watching what we do,” he said. “When the American people speak loudly enough, lo and behold, Congress listens.”

The president and Congress are negotiating on a budget deal to avoid $607 billion in automatic spending cuts and tax increases set to begin Jan. 1. The Congressional Budget Office has said failure to reach an agreement may push the economy into a recession next year and boost the unemployment rate to 9.1 percent in the fourth quarter of 2013, compared with 7.9 percent now.

The administration planned to send a high-level delegation to Capitol Hill today to talk through the situation. Treasury Secretary Timothy Geithner and Rob Nabors, the White House legislative affairs director, will visit the top leaders of both parties in both houses, an administration official said.

The president’s appearance with taxpayers was part of a week of campaign-style events staged by the White House to rally public support for its side in the fiscal fight. He planned to meet with 14 chief executives of corporations at the White House later in the day and travel to the Philadelphia suburbs to tour a factory on Friday.

Republicans in Congress have resisted letting the George W. Bush-era tax cuts expire for anyone. But Rep. Tom Cole, an Oklahoma lawmaker and a highly regarded party political strategist, broke with his party leadership on Tuesday by calling for a quick deal with Obama on extending the tax cuts just for the middle class.

And some Republicans have begun to make the argument that extending the cuts for 98 percent of Americans would still be a victory for their party.

Obama seemed to refer to that during his event in the office building adjacent to the White House. “I’m glad to see, if you’ve been reading the papers lately, that more and more Republicans in Congress seem to be agreeing with this idea that we should have a balanced approach,” he said.

But a prominent figure in the fiscal discussions expressed pessimism that the two sides would be able to reach an agreement to avert the fiscal cliff.

“I believe the probability is that we are going over the cliff, and I think that will be horrible,” Erskine Bowles, a former White House chief of staff who served as co-chairman of Obama’s deficit-reduction commission, said at a breakfast hosted by The Christian Science Monitor. “It will be devastating to the economy.”

Bowles criticized his fellow Democrats for focusing on taxation while refusing to spell out where they’re willing to reduce spending and by how much.

“We need to talk more about the spending side of the equation,” he said, adding that Obama’s projected spending cuts in his proposed 2013 budget aren’t sufficient. Those include $340 billion in savings from Medicare and Medicaid programs and another $1.1 trillion in already agreed-on savings.

Meanwhile, debt commission co-chairman Alan Simpson rapped GOP lawmakers as intransigent, likening them to a rigid fireplace poker but “without the occasional warmth.”

The pair warned Wednesday against partial solutions that would just kick the can down the road.

“The can isn’t a can now, it’s a 55-gallon drum filled with explosives,” Simpson said.

Republicans have said Obama seems more interested in perpetuating his campaign than in sitting down to hash out the difficult issues. They also note they have expressed a willingness to raise tax revenue by closing loopholes and limiting deductions, but they have complained that Obama has not focused as much on the spending side of the equation, particularly so-called entitlement programs like Medicare and Medicaid.

“We have not seen any good-faith effort on the part of this administration to talk about the real problem that we’re trying to fix,” Rep. Eric Cantor, R-Va., the House majority leader, said Wednesday. “This has to be a part of this agreement, or else we just continue to dig the hole deeper, asking folks to allow us to kick the can down the road further. And that we don’t want to do.”

House Speaker John Boehner, an Ohio Republican, echoed that argument but expressed hope that he could reach an agreement with Obama. “It’s time for the president and Democrats to get serious about the spending problem that our country has,” he said.

“But I’m optimistic that we can continue to work together to avert this crisis, and sooner rather than later,” he said before meeting with a group of executives, some of whom were heading to the White House later for a discussion with Obama.

Some of the executives who met with Boehner and other House Republican leaders, including Lloyd Blankfein of Goldman Sachs and David Cote of Honeywell International, are part of the Campaign to Fix the Debt, a bipartisan group promoting deficit reduction that hasn’t endorsed a specific plan. Blankfein has said he would support higher individual taxes as part of a deal.

“We had a constructive conversation in which we exchanged ideas on how best to solve the fiscal cliff,” Rep. Kevin McCarthy of California, the third-ranking House Republican, said in a statement after the meeting. “Everyone in the room is committed to reaching an agreement that will prevent us from going over the cliff by spurring economic growth and reducing the debt burden on hardworking Americans.”

The chief executives scheduled to meet with Obama include Blankfein, Muhtar Kent of Coca-Cola Co., Douglas Oberhelman of Caterpillar Inc. and Arne Sorenson of Marriott International Inc.

Blankfein said after meeting with lawmakers that the executives are “obligated to try” to help move toward a deal.

“We and everybody else in the country have a lot at stake,” he said. “We have a lot of time and capacity to engage on these issues because it’s an issue of utmost importance to everybody.”

Information for this article was contributed by Peter Baker of The New York Times; by Richard Rubin, Roger Runningen, Kathleen Hunter, Julianna Goldman and Roxana Tiron of Bloomberg News; and by Kevin G. Hall of McClatchy Newspapers.

Front Section, Pages 1 on 11/29/2012

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