Obama warns GOP: No debt-ceiling fight
Another top Republican signals support for tax hike.
WASHINGTON — President Barack Obama warned congressional Republicans on Wednesday not to inject the threat of a government default into complex fiscal cliff negotiations aimed at avoiding year-end tax increases and spending cuts that could harm the economy.
“It’s not a game I will play,” declared Obama as Republicans struggled to find their footing in talks with a recently re-elected president and unified congressional Democrats.
Among the Republicans, Sen. Tom Coburn of Oklahoma became the latest to break ranks and say he could support Obama’s demand for an increase in tax rates at upper incomes as part of a comprehensive plan to cut federal deficits.
House Majority Leader Eric Cantor said Republicans want to “sit down with the president. We want to talk specifics.” He noted that the GOP had made a compromise offer earlier in the week and the White House had rejected it.
Since then, neither Obama nor congressional Democrats have signaled interest in negotiations that both sides say are essential to a compromise. Presidential aides have even encouraged speculation that Obama is willing to let the economy go over the “fiscal cliff” if necessary and gamble that the public blames Republicans for any fallout.
Eventually, Democrats acknowledge, there will be compromise talks, possibly quite soon, toward an agreement that raises revenues, reins in Medicare and other government benefit programs, and perhaps raises the government’s $16.4 trillion borrowing limit.
For now, the demonstration of presidential inflexibility appears designed to show that, unlike two years ago, Obama will refuse to sign legislation extending toprate tax cuts and also to allow public and private pressure to build on the Republican leadership.
So far, the GOP has offered to support nonspecified increases to raise tax revenues by $800 billion over a decade but has rejected Obama’s demand to let the top income tax rate rise from 35 percent to 39.6 percent.
To buttress their case, Republican officials in Congress pointed to numerous proposals that Obama has previously advanced that could generate the same amount of revenue he is seeking — without raising rates. The list includes limiting the tax deductions taken by upper-income taxpayers, raising taxes on the oil and gas industry, and curbing or eliminating the deductibility of taxexempt bonds.
The “fiscal cliff,” with its year-end deadline, refers to increases that would affect every worker who pays federal income tax, as well as spending cuts that would begin to bite defense and domestic programs alike.
President Barack Obama tells members of the Business Roundtable in Washington on Wednesday that the deficit deadlock is hurting the economic recovery.