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Obama stands pat on tax hikes for wealthy

Nov. 9, 2012 at 3:09 PM   |   Comments

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WASHINGTON, Nov. 9 (UPI) -- President Obama invited congressional leaders to the White House to discuss the U.S. fiscal crisis while holding firm on his desire raise taxes for the wealthy.

"I'm open to compromise. I'm open to new ideas," he said Friday in his first White House statement since winning re-election. "I'm committed to solving our fiscal challenges, but I refuse to accept any approach that isn't balanced."

Repeating a sentiment spoken Tuesday, Obama said, "[The] American people voted for action not politics as usual. You elected us to focus on your jobs, not ours."

In that spirit, he said he invited leaders of both parties to the White House next week "so we can start to build consensus around the challenges that we can only solve together."

Obama said he also would invite business, labor and civic leaders from all across the country to get their input as well.

"I'm not going to ask students and seniors and middle class families to pay down the entire deficit, while people like me making over $250,000 aren't asked to pay a dime more in taxes. I'm not going to do that."

Earlier House Speaker John Boehner held just as firm the Republican position that tax rates for the wealthy, which were cut during President George W. Bush's administration, shouldn't be allowed to expire at the end of the year.

"Everyone wants to get our economy moving again. Everyone wants to get more Americans back to work again," Boehner said Friday during his news conference. "Raising tax rates will slow down our ability to create the jobs that everyone says they want."

The country faces is approaching what has been called a fiscal cliff at the end of the year -- a confluence of the expiration of the bush tax rate cuts for everyone, across-the-board spending cut of about 8 percent to 10 percent for all government agencies, including defense, an end to the payroll tax holiday and millions of middle class taxpayers being affected by the alternative minimum tax.

"Right now, if Congress fails to come to an agreement on overall deficit reduction package, everybody's taxes will go up on Jan. 1," Obama said. "That makes no sense."

Even if there are disagreements about a tax increase for the wealthy, "nobody -- not Republicans, not Democrats -- want taxes to go up for folks making under $250,000 a year," Obama said.

"So let's not wait. Even as we're negotiating a broader deficit reduction package, let's extend the middle class tax cuts right now," Obama said. "Let's do that right now."

During his news conference, Boehner said lawmakers must come to an agreement with the president "but this is the president's opportunity to lead."

"Members of the House majority understand how the fiscal cliff" would hurt, Boehner said, which is why the GOP-led chamber voted to extend rates for a year "so we have time to overhaul the tax code."

He reminded reporters Wednesday he outlined "a responsible path forward to avert the fiscal cliff" where the planned spending cuts can be replaced, the current tax rates can be extended and entitlement and tax reforms can begin.

"Now, 2013 should be the year we begin to solve our debt through tax reform and entitlement reform, and I'm proposing that we avert the fiscal cliff together in a manner that ensures that 2013 is finally the year that our government comes to grips with the major problems that are facing us," Boehner said.

Such a framework can lead to common ground for discussions.

He said raising tax rates for the wealthiest Americans would hurt small businesses and, citing a report for Ernst & Young, eliminate 700,000 jobs.

Boehner said he had a "cordial" conversation with Obama earlier this week.

"I think we both understand that trying to find a way to avert the fiscal cliff is important for our country, and I'm hopeful that productive conversations can begin soon so that we can forge an agreement that can pass the Congress."

While not getting specific, Boehner said, "It's clear that there are a lot of special interest loopholes in the tax code, both corporate and personal. ... And by lowering [tax] rates and cleaning up the tax code, we know that we're going to get more economic growth. It'll bring jobs back to America. It'll bring more revenue."

A simpler tax code also will be more efficient in bringing in more revenue, he said, noting the current code "only collects about 85 percent of what's due the government."

The Congressional Budget Office Thursday predicted the fiscal cliff would drive the U.S. economy back into recession next year and push the jobless rate to 9.1 percent by the end of 2013.

The U.S. federal budget deficit for the 2012 fiscal year, which ended Sept. 30, was $1.089 trillion, $208 billion less than the 2011 deficit, the Treasury Department said last month.

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