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White House 'absolutely' willing to go off fiscal cliff if GOP doesn't blink

By David Espo and Ken Thomas

Associated Press

POSTED:
LAST UPDATED: 12:21 p.m. HST, Dec 06, 2012


FALLS CHURCH, Va. » President Barack Obama, trying to put a personal touch on "fiscal cliff" negotiations, visited a northern Virginia family's basement apartment today to press his hardline on tax rate increases for the wealthy.

"We're in the midst of the Christmas season," Obama said, sitting at a table in the Santana family's Falls Church, Va., home. "I think the American people are counting on this getting solved. The closer it gets to the brink, the more stress there is going to be."

Obama and lawmakers have until the end of the year to avert across-the-board spending cuts and tax increases. The president reiterated the firm stance he has taken in recent days, warning that he's willing to let that economy-rattling double whammy take effect if Republicans don't drop their opposition to higher tax rates for the wealthy.

"Just to be clear, I'm not going to sign any package that somehow prevents the top rate from going up for the folks in the top 2 percent," Obama said.

"But I do remain optimistic that we can get something done that is good for families like this one and is good for the American economy," Obama said.

The president's quick trip to northern Virginia — just a 15-minute drive from the White House — is part of an effort to rally public support for his tax proposals. The family whose home he visited was one of many who shared a story online, at the White House's urging, of how they would be hurt if their taxes went up at the end of the year. The president will also travel to Detroit on Monday.

Obama and House Speaker John Boehner spoke on the phone Wednesday, their first known conversation in nearly a week. Neither side provided details of the call, but the White House said the lines of communication with Capitol Hill Republicans were open and there had been multiple conversations between staff.

Unless the president and Republicans reach a deal, George W. Bush-era tax rates will expire on all income earners on Jan. 1. Obama wants to continue them for 98 percent of Americans, while letting them expire on the upper income earners.

If Republicans try to block that effort, Treasury Secretary Timothy Geithner said, the administration will "absolutely" let the country go over the fiscal cliff.

The size of the problem is so large it can't be solved without rates going up," he told CNBC on Wednesday.

Geithner drew a fierce response from Republicans. Sen. Orrin Hatch of Utah called his statement "stunning and irresponsible." He added, "Going over the fiscal cliff will put our economy, jobs, people's paychecks and retirement at risk, but that is what the White House wants, according to Secretary Geithner, if they don't get their way."

Economists inside and outside the government warn that failing to reach agreement on taxes and spending could land the economy back in recession.

Beyond his insistence that taxes increase on the wealthy, Obama has also warned Republicans not to inject the threat of a government default into negotiations over the fiscal cliff as a way of extracting concessions on spending cuts.

"It's not a game I will play," he said Wednesday, recalling the brinkmanship of last year in which a budget standoff pushed the Treasury to the edge of a first-ever default.

The White House reaffirmed today that it did not believe the president had the authority through the 14th Amendment to raise the debt ceiling by executive order. Democrats have previously suggested Obama could take that step.

Both sides say they want a compromise, although the administration's hand in bargaining is strengthened by polls showing public support for Obama's position on taxes, as well as by his re-election last month. The president is also working to rally the public to his side and has a trip scheduled to Detroit next week.

In a concession, Republican leaders have agreed to back increased tax revenue. Yet despite defections from within the rank and file, they have so far balked at Obama's demand that rates go up on income over $200,000 for individuals and $250,000 for couples. They have also called for spending cuts and measures to slow the growth of government benefit programs. Earlier this week, they called for curbing the growth in Social Security cost-of-living increases, as well as delaying Medicare eligibility from 65 to 67, beginning in a decade.

Obama has said he will back spending cuts, including savings in Medicare, as part of a deal that includes the tax proposal that was a key part of his re-election bid.

Once Republicans yield on taxes, he told the Business Roundtable, "We can probably solve this in about a week; it's not that tough."

Republicans argue that they can raise about $800 billion in additional government revenue over a decade by closing loopholes and narrowing tax deductions on the wealthy, rather than raising income tax rates. They argue the rate increase would impose a particularly harmful impact on the economy and job creation at a time when the country is still struggling to recover fully from the deepest recession in decades.

Espo reported from Washington.







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brian606 wrote:
Both sides are willing to sacrifice the people's interests for the political game. Change we can believe in: Term limits.
on December 6,2012 | 12:12PM
walrus808 wrote:
I don't think either party cares if we drive off the cliff, they're only focused on their own self interest. Both have forgotten who they work for and if neither party can give a little to come to a compromise, then frankly, we're all hosed. For the White House to say that it "absolutely" will let us go off the cliff if the Republicans don't give more (they've already agreed to some tax hikes) is pretty arrogant if you ask me. If this is allowed to happen it only shows that the President and his cronies are more interested in ideology than the people that they govern.
on December 6,2012 | 12:37PM
thepartyfirst wrote:
Let's call the POTHUSs' bluff and go over.
on December 6,2012 | 01:02PM
imua67 wrote:
Sounds very party centric and arrogant, maybe he ought to think about taking his Christmas vacation in Kenya, Indonesia or Chicago!
on December 6,2012 | 01:10PM
entrkn wrote:
the GOP are losers and they are trying to drag us down to appease Karl Rove, Rush Limbaugh, the Koch bros, and the rest of their fascist puppet masters...
on December 6,2012 | 01:18PM
false wrote:
You need professional help.
on December 6,2012 | 02:32PM
sumoroach wrote:
Social that you are spend your own money. If taxes go up it should be everyone who pay's. ENTRKN , I hope your taxes go from 10 to 15%. People on the low end need to put some skin in the game. Lets get everyone to pay more taxes, cut spending, and slow entiliments down. OBAMA drove us to this cliff from last year when he reject a proposal everyone agreed on, He now own some thing that he can not blame someone else. Obama said he would work as a bipartisn WHAT A LIE. You vote for him you live with the out come. GO OVER THE CLIFF PLEASE.
on December 6,2012 | 05:15PM
lynnh wrote:
Let's see. Obama promised a balance approach; it got him elected. What dos he come up with? Raise taxes, no reduction in spending, and asking for the power to raise the dept ceiling whenever he sees fit (illegal by the way). He made promises to Bill Clinton in return for speaking at the Democratic Convention. He promised Clinton take he would be allowed to pick some committee members and also that if Hillary ran in 2016, he would support her. After the election, he has now stabbed Clinton in the back, ignored his committee picks, openly told Clinton during a phone call that he was not sure he could support Hillary. Clinton is fuming mad! What does this tell you about your "saint" of a president? He is a two-faced lair! He has lied all through his current administration, during the election, and you fell for it again. Do us all a favor...never vote again!
on December 6,2012 | 11:40PM
AhiPoke wrote:
Total absolute BS!!! Raising taxes on the "wealthy" may help but it will not solve the country's economic problems. I say, give the president what he wants and hope that he finally takes responsibility. Not doing so means he'll continue to blame everyone but himself. If you haven't noticed, he's really good at that. It's all "politics".
on December 6,2012 | 02:58PM
Bdpapa wrote:
After thinking about it, I agree with you.
on December 6,2012 | 03:04PM
sumoroach wrote:
WASHINGTON TWO STEP IS OBAMA FAVORITE DANCE.
on December 6,2012 | 05:16PM
64hoo wrote:
go raise the taxes on the high 2% BUT DON'T SPEND THE MONEY WHICH YOU WILL PROBALLY DO OBAMA THEN YOU WILL HAVE TO GO RAISE TAXES ON THE MIDDLE CLASS BECAUSE RAISING THE TAXES ON THE HIGHER TWO PRECENT WONT EVEN PUT A DENT IN THE DEFECIT.
on December 6,2012 | 05:52PM
false wrote:
I think it is illegal to do the math. Just Kidding
on December 6,2012 | 06:33PM
Tanabe wrote:
Both sides are playing chicken with not only the US economy but the worlds. Republicans, and particularly the stupid Tea Party that drove moderate Republicans like me away from the party, started this mess with their hard line, no compromise stance, now the Democrats are following. I say make a new law that if our elected officials fails to find a compromise, they ALL should be forbidden from ever running for office again.
on December 6,2012 | 06:15PM
false wrote:
With a user name like Tanabe I find it hard to believe you were ever a Republican
on December 6,2012 | 06:34PM
lynnh wrote:
Let's see. Obama promised a balance approach; it got him elected. What dos he come up with? Raise taxes, no reduction in spending, and asking for the power to raise the dept ceiling whenever he sees fit (illegal by the way). He made promises to Bill Clinton in return for speaking at the Democratic Convention. He promised Clinton take he would be allowed to pick some committee members and also that if Hillary ran in 2016, he would support her. After the election, he has now stabbed Clinton in the back, ignored his committee picks, openly told Clinton during a phone call that he was not sure he could support Hillary. Clinton is fuming mad! What does this tell you about your "saint" of a president? He is a two-faced lair! He has lied all through his current administration, during the election, and you fell for it again. Do us all a favor...never vote again!
on December 6,2012 | 11:42PM
kainalu wrote:
And with each passing week, the polls show that more and more Americans are holding the Republicans responsible for the pending disaster. The tax code was one of the major talking points of this last Presidential election. Obama won. Hello? And the GOP would have what to lose if they agreed with Obama? Because they're sure his plans are sure to fail - right? They could take that approach: his plan is a bad one, but we'll go along with this first step so that we don't go over the cliff. Of course, what they're afraid of, is Obama's plan actually working. Duh.
on December 6,2012 | 07:48PM
hawaiikone wrote:
Keep talking about your imaginary polls...
on December 6,2012 | 09:23PM
lynnh wrote:
Let's see. Obama promised a balance approach; it got him elected. What dos he come up with? Raise taxes, no reduction in spending, and asking for the power to raise the dept ceiling whenever he sees fit (illegal by the way). He made promises to Bill Clinton in return for speaking at the Democratic Convention. He promised Clinton take he would be allowed to pick some committee members and also that if Hillary ran in 2016, he would support her. After the election, he has now stabbed Clinton in the back, ignored his committee picks, openly told Clinton during a phone call that he was not sure he could support Hillary. Clinton is fuming mad! What does this tell you about your "saint" of a president? He is a two-faced lair! He has lied all through his current administration, during the election, and you fell for it again. Do us all a favor...never vote again!
on December 6,2012 | 11:43PM
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