Taxing rich may help avoid ‘cliff’: Obama
President asks Republicans to forge a fiscal deal
WASHINGTON — U.S. President Barack Obama threw down the gauntlet Friday demanding Congress fulfil his campaign promise to impose higher taxes on the rich to make a deal that will avoid the so-called fiscal cliff that many experts warn could force the global economy into recession.
In his first public statement since his re-election Tuesday, he challenged the Republican-controlled House of Rep- resentatives to act quickly to build the framework of a fiscal deal.
He said a good start would be immediately to sign a law that would extend tax cuts to the middle class — people who earn less than $250,000.
“I’ve got the pen ready to sign the bill right away,” he said. “I’m ready to do it. I’m ready to do it.”
He said that the American people demand action.
“On Tuesday they said loud and clear they won’t tolerate dysfunction, they won’t tolerate politicians that view compromise as a dirty word, not when so many Americans are still out of work,” he said.
He has invited congressional leaders to the White House next week to begin negotiating a deal. The fiscal cliff refers to a series of legislative measures that will expire Jan. 1 and immediately kick in record tax increases for every American and also impose $530 billion in annual budget cuts, half of which will affect the Defence Department.
Obama’s statements indicated that he is ready once again to go directly to the American people to put pressure on their congressional leaders to support his fiscal plan. Exit polls showed more than 60 per cent of voters approve his tax increases.
“But we can’t just cut our way to prosperity,” he said. “If we are serious about reducing the deficit, we have to combine spending cuts with revenue. That means asking the wealthiest Americans to pay a little more in taxes.”
Obama appeared, however, to extend a conciliatory hand to Republican by saying “I am not wedded to every detail of my plan. I am open to compromise. I am open to new ideas.”
He warned that if Congress fails to come to an agreement on an overall deficit reduction package by year’s end “everybody’s taxes will automatically go up on Jan. 1, everybody’s including the 98 per cent of Americans that pay less than $250,000 a year.”
Earlier Friday Republican House Speaker John Boehner of Ohio appeared equally determined not to raise taxes on the rich. He cited reports that these tax increases will primarily affect small businesses and risk 700,000 jobs.
He indicated Republicans favour ending “the special interest loopholes in the tax code, both corporate and personal” as well as unnecessary tax deductions.