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Obama: Compromise, but not on tax cuts for rich

By Ben Feller

Associated Press

POSTED:
LAST UPDATED: 03:43 p.m. HST, Nov 09, 2012


WASHINGTON >> An economic calamity looming, President Barack Obama today signaled willingness to compromise with Republicans, declaring he was not "wedded to every detail" of his tax-and-spending approach to prevent deep and widespread pain in the new year. But he insisted his re-election gave him a mandate to raise taxes on wealthier Americans.

"The majority of Americans agree with my approach," said Obama, brimming with apparent confidence in his first White House statement since securing a second term.

Trouble is, the Republicans who run the House plainly do not agree with his plans. Speaker John Boehner insisted that raising tax rates as Obama wants "will destroy jobs in America."

So began the "fiscal cliff" political maneuvering that will determine which elected power center — the White House or the House — bends more on its promises to voters. The outcome will affect tens of millions of Americans, given that the tax hikes and budgets cuts set to kick in Jan. 1 could spike unemployment and bring on a new recession.

An exhausting presidential race barely history, Washington was back quickly to governing on deadline, with agreement on a crucial goal but divisions on how to get there. The campaign is over, but another has just begun.

The White House quickly turned Obama's comments into an appeal for public support, shipping around a video by email and telling Americans that "this debate can either stay trapped in Washington or you can make sure your friends and neighbors participate."

Obama invited the top four leaders of Congress to the White House next week for talks, right before he departs on a trip to Asia.

In laying their negotiating markers, all sides sought to leave themselves wiggle room.

"I don't want to box myself in. I don't want to box anybody else in," Boehner said at the Capitol.

Outside all the new the talk of openness, the same hard lines seemed in place.

Obama never expressly said that tax rates on top earners must return to the higher levels of the Bill Clinton era, leading to speculation that he was willing to soften the core position of his re-election campaign to get a grand debt deal with Republicans. "I'm not wedded to every detail of my plan. I'm open to compromise," he said.

But his spokesman, Jay Carney, seemed to slam that door. He said Obama would veto any extension Congress might approve of tax cuts on incomes above $250,000.

Obama's remarks were choreographed so that a diverse-looking group of Americans stood behind him and dozens more were invited to pack the East Room. In the weeks ahead, he plans to pull in the public as a way to pressure Congress.

"I am 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," said Obama.

He said voters plainly agreed with his approach that both tax hikes and spending cuts are needed to cut the debt.

"Our job now is to get a majority in Congress to reflect the will of the American people," Obama said.

About 60 percent of voters said in exit polls Tuesday that taxes should increase, either for everyone or those making over $250,000. Left unsaid by Obama was that even more voters opposed raising taxes to help cut the deficit.

The scheduled year-end changes, widely characterized as a dangerous "fiscal cliff," include a series of expiring tax cuts that were approved in the George W. Bush administration. The other half of the problem is a set of punitive across-the-board spending cuts, looming only because partisan panel of lawmakers failed to reach a debt deal.

Put together, they could mean the loss of roughly 3 million jobs.

Since the election, Boehner and Obama have both responded to the reality that they need each other.

Compromise has become mandatory if the two leaders are to avoid economic harm and the wrath of a public sick of government dysfunction.

Obama says he is willing to talk about changes to Medicare and Medicaid, earning him the ire of the left. Boehner says he will accept raising tax revenue and not just slashing spending, although he insists it must be done by reworking the tax code, not raising rates. The framework, at least, is there for a broad deal on taxes.

Yet the top Democrat and Republican in the nation are trying to put the squeeze on each other as the public waits for answers.

"This is his opportunity to lead," Boehner said of Obama, not long before the president said: "All we need is action from the House."

Obama said the uncertainty now spooking investors and employers will be shrunk if Congress extends — quickly — the tax cuts for all those except the most-well off.

The Senate has passed such a bill. The House showed no interest on Friday in Obama's idea.

Obama and Republicans have tangled over the Bush tax cuts for years. The president gave in to Republican demands to extend the cuts across the board in 2010, but he ran for re-election on a pledge to allow the rates to increase on families making more than $250,000 a year.

Also lurking is the expiration of the nation's debt limit in the coming weeks. The last fight on that nearly led the United States to default on its bills.

When asked if he would try to use that issue as leverage, Boehner said it must be addressed "sooner rather than later."

The national debt now stands above $16 trillion. The government borrowed about 31 cents of every dollar it spent in 2012.

___

Associated Press writers Andrew Taylor, Donna Cassata, Julie Pace, Matthew Daly, Jim Kuhnhenn and Ken Thomas contributed to this report.







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toomuchpilikia wrote:
The cliff is coming....You get what you vote for! Hang on to your wallets (MIDDLE CLASS)!
on November 9,2012 | 09:47AM
8082062424 wrote:
There he goes thinking he all bad .He has divided this country like it never been before. Rich poor , on race on believer and non believer on gay and straight also on legal Americans and illegal Americans. . and he think most Americans support him lol. it split right in half we are a divide nation
on November 9,2012 | 10:10AM
serious wrote:
You are right, so why did Hawaii highly vote for this loser???? Was it the food stamps? Obamacare? I don't know, but someone who has let us into this deficit and says we want more of the same? Watch when he gets his new cabinet. B Clinton as Secretary of State, Jimmie Carter for Secretary of the Treasurer!!!
on November 9,2012 | 11:14AM
8082062424 wrote:
Hawaii folks are hooked up on the D . dose not matter if the person can do the job or if this person will be good for this state it all about the D
on November 9,2012 | 03:52PM
Sandmandoo42 wrote:
Every vote for Obama was not an endorsement of his economic policies by the majority of Americans. Some were for his social positions or against those of Romney. Plus, how many people stayed home because they could not stomach voting for either guy? Even if the election is taken as the will of the majority, it is a very slim majority and should not be portrayed as a mandate. This kind of empty rhetoric is not unifying, as he promised. It is divisive, disregarding the millions who disagree with him. If only there were a way to double tax anyone who voted for him and complains about the economic storm that is coming. Oh wait, everything wrong with America for the 21st century is Bush's fault.
on November 9,2012 | 10:19AM
Pacej001 wrote:
You got it all. Wouldn't be surprised to see a proposal for an It's Bush's Fault monument on the Mall in DC.
on November 9,2012 | 10:52AM
lee1957 wrote:
Looks like we are in for the do nothing alternative, which means our taxes are going up.
on November 9,2012 | 10:27AM
CriticalReader wrote:
The law hiking taxes on the rich should be named the Adelson-Koch-Citizens United Act of 2013. Those guys really messed up their Club Bretheren. They taught the GOP that $$$ don't equal VOTES and CEOs can't intimidate or scare people into how to pull the voting booth lever. The pressure is on the GOP House members here. Do the right thing? Re-election in 2014. Act to cause gridlock? Their Democrat opponents show produce posters with GOPers pictures and the tagline: "It's THIS person's fault".
on November 9,2012 | 12:12PM
Kuokoa wrote:
Here we go again! This is going to be a fight for the next four years! This guy thinks he can force his socialist ideology on all Americans and get away with it. I personally do not agree with doing away with all of the entitlement programs but I do believe that we need to have more controls on who gets it. As far as taxing the super rich, that is like shooting yourself in the foot. The 1% ers as they are called, own or invest in 90% of the businesses in this country. It is their money that actually creates the economy. Tax them and they will take their money elsewhere.
on November 9,2012 | 12:40PM
CriticalReader wrote:
There's a memo that was sent out. It said, "that argument doesn't work" The memo's been copied and redistributed (had to get that word in) several times: after Reagan tried it, after Bush tried it, and then as a cover sheet to bail out bills required by the policies of Bush II. OH, yeah, it's also now a part of the Romney campaign staff exit interviews.
on November 9,2012 | 12:56PM
Tanabe wrote:
I don't care for Obama's policy, but he and the republicans better compromise in the next month to come up with a solution to Sequestration. If that happens America is screwed. The republicans especially better negotiate. Hopefully with elections over for two years, the damn Tea Party won't be able to hold the party (and as such the nation) hostage.
on November 9,2012 | 12:45PM
Pacej001 wrote:
After evaluating the president's tax the rich proposal, the CBO concludes that the increased tax will shave approx. 200K off of job growth and reduce annual GDP by a small, but tolerable (their view) amount. Given the tough times, there should be a payoff for retarding job growth, but there isn't. The President's tax increase will only take our projected deficit down by about $80billion/year from $1.1 to $1.02 trillion. For Mr. Obama to sell this as a major attack on the deficit is laughably unserious unless very large spending cuts are part of the deal. Instead he's proposing "investments" (democrat-speak for more spending) and he's proposing nothing to control entitlement spending. So, the republicans need to reluctantly go along with revenue increases (thru limited tax deductions for the wealthy) only if the president will propose substantial cuts elsewhere, entitlement spending controls, and agrees to reform of our growth-killing income and corporate tax codes. In a perverse way, it'll be fun to watch the party most dependent on an entitlement mentality among its base have to seriously come to terms to entitlement promises they've that can't possibly be kept.
on November 9,2012 | 01:39PM
Pacej001 wrote:
After evaluating the president's tax proposal, the CBO concludes that the increased tax will reduce approx. 200K off of job growth and reduce annual GDP by a small, but tolerable (their view) amount. Given the tough times, there should be a payoff for reducing job growth, but there isn't. The President's tax increase will only take our projected deficit down by about $80billion/year from $1.1 to $1.02 trillion. For Mr. Obama to sell this as a major attack on the deficit is unserious unless very large spending cuts are part of the deal. Instead he's proposing "investments" (democrat-speak for more spending) and he's proposing nothing to control entitlement spending. So, the republicans need to reluctantly go along with revenue increases (thru limiting tax deductions for the wealthy), but only if the president will propose substantial cuts elsewhere and entitlement spending controls and agrees to reform of our growth-killing income and corporate tax codes. There is no way to cut Defense deeply enough (only20% of spending) or raise tax revenues enough (60-80%) to cover the unfunded entitlement gap. In a sad way, it'll be fun to watch the party most dependent on an entitlement mentality among its base have to seriously come to terms to entitlement promises they've that can't possibly be kept.
on November 9,2012 | 01:46PM
saywhatyouthink wrote:
Repubs are out in force after losing the battle. No tax cuts for anyone if the rich folks can't keep their lower rate too? Huh! Forget income tax rates, raise the capital gains tax to 35%, that will hit the rich fol
on November 9,2012 | 02:52PM
Pacej001 wrote:
It would also be an incredibly dumb move. Why do you think many countries, Canada for one, have lowered their capital gains rates? Answer: encouraging investment and encouraging risk takers, not discouraging these, leads to economic growth and expansion, meaning job growth and rising living standards. Of course, if punishing someone who has more than you do just feels too good to let further economic stagnation be a problem, then have at it.
on November 9,2012 | 03:26PM
control wrote:
The republicans have no evidence to show that cutting taxes for the wealthy produced any jobs in the US. Any financial benefit that was gained went straight into the CEOs offshore retirement account. None of it was re-invested. No one is buying that excuse anymore. Kind of like the tobacco companies who claimed smoking wasn't harmful and bamboozled congress and america with their fake research for dozens of years.
on November 9,2012 | 03:06PM
Pacej001 wrote:
No one is talking about cutting taxes on the wealthy. Obama is proposing to raise them on those making over $250K which, says the Congressional Budget Office, will cost about 200,000 jobs in lost economic growth. Worse still, again, according to the Congressional Budget Office, Obama's proposed tax increase will reduce our projected annual deficit from $1.1 trillion to $1.02 trillion. In other words, Obama's election-winning tax-the-rich proposal will cost jobs and have almost no impact on our debt and deficit. If the tax increase has no meaningful positive effect, then there must be another reason for it. Political, to rile up the math-challenged liberal base? Punishment for people who are financially successful. Doesn't make much sense other than one of these or just an out and out act of class warfare spite.
on November 9,2012 | 03:35PM
CriticalReader wrote:
He won. He gets to decide what agenda he wants to push. The way certain elements of the GOP ran against him has consequences.
on November 9,2012 | 06:50PM
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