Last Updated:April 24 @ 08:26 pm

Obama presses GOP on taxing rich to avert 'cliff'

By David Espo

WASHINGTON (AP) - President Barack Obama challengedcongressional Republicans Wednesday to let taxes rise on the wealthiest Americans on both economic and political grounds, noting he campaigned successfully for re-election on the point and contending it would instantly ease the threat of the "fiscal cliff" plunging the nation back into recession.

"A modest tax increase on the wealthy is not going to break their backs," Obama said of the nation's top income earners. "They'll still be wealthy," he said at his first news conference since winning a second term.

At the same time, the president stressed he was amenable to compromise on other approaches from Republicans who say they will refuse to raise tax rates. "I believe this is solvable," he said during the news conference.

At a news conference of his own a short while later, House Speaker John Boehner, R-Ohio, agreed that a bipartisan "spirit of cooperation" has been evident since the election that augurs well for talks expected to begin Friday at the White House.

However, he said of the president's proposal, "We are not going to hurt our economy and make job creation more difficult which is exactly what that plan would do."

Obama seemed eager to avoid issuing any ultimatums. Asked if it would be a deal-breaker for Republicans to refuse to allow the top tax rate to revert to 39.6 percent from the current 35 percent, he sidestepped. "I just want to emphasize I am open to new ideas if the Republican counterparts or some Democrats have a great idea for us to raise revenue, maintain progressivity, make sure the middle class isn't getting hit, reduces our deficit."

Wall Street wasn't encouraged that agreement was becoming more likely. The Dow Jones industrial average dropped 185 points for the day.

The president's remarks were his first extended public discussion of the issue that is dominating the postelection session of Congress, and they followed statements earlier in the week from Boehner and Mitch McConnell of Kentucky, the Senate GOP leader.

Both men have said they, too, want a compromise and have said they are willing to support additional tax revenues as part of a deal that includes tax reform and measures to recast the government's largest benefit programs. But they appear to rule out any legislation that raises tax rates.

McConnell issued a statement calling on Obama to "propose a specific plan that includes meaningful entitlement reforms to strengthen and protect these programs for future generations." He referred to Medicare, Medicaid and Social Security.

The president has moved aggressively this week to lay down markers for any negotiations, first meeting with labor leaders and representatives of liberal groups at the White House, then welcoming a delegation of corporate chief executives for a private session moments after wrapping up his news conference.

Aides said the president is prepared to go to the public in the coming days to enlist support for his position. He said Wednesday, "The American people understood what they were getting" when they voted for him after a campaign that focused heavily on taxes.

Obama is expected to welcome the top leaders of both political parties to the White House on Friday for their first postelection face-to-face discussion of the fiscal cliff, the combination of tax increases and across-the-board spending cuts that will take effect as 2012 gives way to the new year unless Congress intervenes.

Economists in both parties have cautioned that, given the sluggish state of the economy, a return to recession is likely unless lawmakers and the president reach a compromise on legislation.

At his news conference, Obama laid out bleak prospects if he and lawmakers can't reach agreement.

"Everybody's taxes will automatically go up, including the 98 percent of Americans who make less than $250,000 a year, and the 97 percent of small businesses who earn less than $250,000 a year. ... Our economy can't afford that right now," he said.

As an alternative, the president suggested that Congress pass legislation immediately to "prevent any tax hike whatsoever on the first $250,000 of everybody's income," a measure that he noted has passed the Senate and that Democrats in the House are ready to embrace.

"We should not hold the middle class hostage while we debate tax cuts for the wealthy, and we should at least do what we agree on, and that's keep middle class taxes low," he said.

He said enactment of legislation along those lines would eliminate half of the fiscal cliff, and he suggested that he and lawmakers could then "shape a process whereby we look at tax reform" and "take a serious look at how we reform our entitlements, because health care costs continue to be the biggest driver of our deficits.

Obama signed legislation two years ago extending the Bush-era tax cuts in their entirety after saying he wouldn't.

Asked why this time will be different, he said, "What I said at the time was what I meant, which is that this was a one-time proposition."

Now, he said, legislation that keeps most of the cuts in place but not those for the upper-income earners would be "actually removing half the fiscal cliff."

White House Press Secretary Jay Carney said the president would bring to the table a proposal for $1.6 trillion in new taxes on business and the wealthy when he begins discussions with congressional Republicans, a figure that Obama outlined in his most recent budget plan. The targeted revenue is twice the amount Obama discussed with Republican leaders during debt talks during the summer of 2011.

Carney said the figure, combined with $1.1 trillion in spending cuts already signed into law, would reduce deficits by $4 trillion.

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8 Comments

  1. bna42Comment by bna42
    November 15, 2012 @ 10:07 am

    “The American people understood what they were getting” when they voted for him after a campaign that focused heavily on taxes”. “. . . the president would bring to the table a proposal for $1.6 trillion in new taxes on business and the wealthy”

    As the old adage says: “They made their bed, now let them lie in it”. In other words it is time for the people who supported Obama to take responsibility for their decision and experience the suffering he will cause. When enough of them become so devastated by Obama’s policies that they have no hope, maybe they will begin to see him as the anti-American Marxist that he has always been.

    Obama’s entire agenda is wealth distribution, and it appears that he is on the verge of realizing his goal. Those who support Obama are the people who pay on federal income taxes, expect government to provide for them, and are wanting something for nothing.

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  2. csbridgComment by csbridg
    November 15, 2012 @ 10:22 am

    “I just want to emphasize I am open to new ideas if the Republican counterparts or some Democrats have a great idea for us to raise revenue, maintain progressivity, make sure the middle class isn’t getting hit, reduces our deficit.”
    That statement is priceless. The middle class is taking the brunt of all his rainbow dreams. But then I guess you can’t really have a middle class in a socialistic society. I also have to wonder who came up with the $250,000 figure as being “rich”. With prices the way they are going you will soon need that just to get by.

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    • westtexaslibraryladyComment by westtexaslibrarylady
      November 15, 2012 @ 12:19 pm

      With ObamaCare being a tax, everybody except the freeloaders are paying. The $250,000 figure is a red herring that is meaningless. For the past 4 years, even with modest wage increases, my net pay has dropped significantly each year. I’m not even lower-middle-class any more; the only thing that qualifies me as one the “rich” who is helping to pick up the tab for the poor unfortunates who need the government’s help, and who quite frequently have way better stuff than I do, is the fact that I’m actually working and making a wage.

      It’s naive to suggest that only the rich will feel the pinch, and that it will be tiny because they’re rich. I suspect the people who have lost their jobs because the “rich” small business owners who employed them have been taxed and regulated out of the business are feeling the pinch, too.

      And last week I got all warm and fuzzy when I realized that next year more of my income will be taxed because the maximum amount for Flexible-Cafeteria-Plans for medical expenses has been reduced. As I did the math about how much of hit I was going to take, I reminded myself that only the rich will be impacted. Only the rich will pay more taxes — I guess only the rich have a major chunk of their annual income pay for medical bills, so few hundred dollars more in taxes is inconsquential. I’m just misunderstanding that it’s going to cost me more, the same way I misunderstood how all my copays increased by 30% and the same way I misunderstood that I simply couldn’t take my children to all their necessary doctor’s visits for their chronic conditions because I simply didn’t have the money to write the check. BUT their health care is so much better now that we have ObamaCare. It’s just asthma and cardiac issues, what’s the big deal? What possible difference could a missed visit or prescription make? If I truly understood what a marvelous thing Obamacare was and how it’s going to be so cost-effective I’d be able to see how much better off my family is. I grew up in the military in the 1960s — I know exactly what socialized medicine looks like and how well it DOESN’T work. I don’t need to look at Europe.

      One thing I haven’t misunderstood is that I know working people poorer than me who are staggering under the hit they’re taking as a result of “only the rich” being targeted. There is no doubt that the middle class is feeling the impact of the lies, but the working poor are being crushed. Without a change in direction there will be an overwhelming number of proud, hard working people who have been surviving on practically nothing simply because they believe in the value of hard work, self-reliance, and accomplishment who will have no alternative except to become reliant on the government. It’s already happening, and to rob these individuals of their self-respect by increasing the cost of their lives so their “wealth” can be redistributed is absolutely criminal.

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    • stickmanComment by stickman
      November 15, 2012 @ 3:58 pm

      I want the rich – even multi-millionaire Obama – to pay until they bleed. THEN and only then will they realize the government they have bought.

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  3. niceladywithdogComment by niceladywithdog
    November 15, 2012 @ 11:11 am

    I’ve spoken with too many local people who voted to avert the garbage Obama smeared about Romney. People too glassy-eyed to seek truth, telling me they were afraid of what Romney (in one case, “that other guy, what’s his name”) represented, according to Obama. Sucked in by the MSM, casting their precious vote based on memes, phrases, sound bytes by the Great Divider. I’m stunned by the passivity and butt-ignorance of this once adult nation. Lord, come quickly.

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  4. David in MAComment by David in MA
    November 15, 2012 @ 11:44 am

    Ever notice that without any make-up obozo looks like a dragged out doper?

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  5. KAHR50Comment by KAHR50
    November 15, 2012 @ 11:49 am

    The masses who voted for him are too stupid to understand reality – they live in a total world of “what if’s” – like the pathetic Lennon song IMAGINE.

    They think that a 4.9 % more tax percentages on the “rich’ is enouth to pay off the US mortgage. It is an irrelevant amount of money given our insatiable spending habits – habits spurned on by an ever increasing mass of idiots who produce nothing and expect everything. But the idiots march along in blissful ignorance.

    And now that he is in office again, the 47% is sure to grow to 60% and that folks is all she wrote.

    Imagine theres no people – to works and pay for me
    Imagine there’s no water – clean enough to drink
    Imagine all those corporations – bankrupted and uselses
    Imagine theres no freedomm – the government tells all to do

    Night night America…

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  6. stickmanComment by stickman
    November 15, 2012 @ 3:55 pm

    I’m waiting for Obama to tell us how much money he “thinks” he will get by raising the taxes on the rich. AND, I want to know why he thinks that increased taxation will not trickle down to me.

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