Obama, House Speaker
Take Positions on Budget Before Negotiations
November 09, 2012
After a contentious election, another political battle is brewing in
Washington, this one with potentially serious consequences for the U.S.
economy. Both sides staked out their positions Friday on what to do
about the so-called "fiscal cliff" - a combination of tax hikes and
spending cuts that would automatically take place at the end of the
year. Economists warn failure by U.S. lawmakers could send the economy
into another tailspin.
Fresh from his election victory, President Barack Obama sounded
conciliatory Friday - inviting congressional and business leaders to the
White House next week to begin discussions on a deficit reduction plan.
The president said he is open to all ideas, but pushed back against any
plan that relies solely on spending cuts to reduce the nation's debt.
"We can't just cut our way to prosperity. If we're serious about
reducing the deficit, we have to combine spending cuts with revenue, and
that means asking the wealthiest Americans to pay a little more in
taxes," said Obama.
Republicans say tax hikes on the wealthy would result in massive job
Speaking an hour before the president, House Speaker John Boehner said
he would support some revenue increases as part of overall tax reforms.
But the Republican congressional leader wants to extend the deadline for
negotiations to work out differences.
"2013 should be the year we begin to solve our debt through tax reform
and entitlement reform, and I'm proposing we avert the fiscal cliff
together in a manner that insures that 2013 is the year that our
government finally comes to grips with the major problems that are
facing us," said Boehner.
Automatic tax increases and drastic cuts to defense and domestic
spending kick in January 1, 2013 unless Congress is able to craft a plan
to reduce the nation's nearly $16-trillion debt.
campaigning for months on allowing tax cuts to expire only for wealthy
Americans, Obama said the time for "drama and negotiations" is over.
"Nobody, not Republicans, not Democrats want taxes to go up for folks
making under $250,000 a year. 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, let's do that right now," said the president.
Uncertainty over the U.S. fiscal crisis has roiled financial markets for
weeks. The Congressional Budget Office says the combination of higher
taxes and reduced spending could cut the deficit in half. But it would
also push the world's largest economy into a recession, cost millions of
jobs and threaten economic growth in other countries.