Taxes will rise on all Americans in 23 days without bipartisan Congressional intervention. But President Obama and House Republicans are showing little sign of breaking the frosty standoff over the “fiscal cliff.”
Both sides remain at loggerheads over what to do about tax rates for the top two percent of income-earners and the nation’s debt limit.
In his weekly address, Obama says he wants an immediate resolution, but only if Republicans agree to raise the top tax rates on individuals earning $200,000 or more.
“If we’re serious about reducing our deficit while still investing in things like education and research that are important to growing our economy – and if we’re serious about protecting middle-class families – then we’re also going to have to ask the wealthiest Americans to pay higher tax rates,” he says. “That’s one principle I won’t compromise on.
“After all, this was a central question in the election,” Obama adds, alluding to the fact that he won.
Republicans, empowered by post-election control of the House of Representatives, remain equally resolved to prevent rates on the wealthiest Americans from rising.
“Tax increases will not solve our $16 trillion debt. Only economic growth and a reform of entitlement programs will help control the debt,” said Sen. Marco Rubio of Florida in the Republican weekly address.
“We must reform our complicated, uncertain, job-killing tax code, by getting rid of unjustified loopholes,” Rubio said. “But our goal should be to generate new revenue by creating new taxpayers, not new taxes.”
Obama wants rate hikes for individuals earning $200,000 or more per year and families earning $250,000 or more, and retain permanent power to ask for more credit to underwrite government spending. Republicans want to extend current tax rates for at least another year and retain the control over whether to expand the government’s purse.
The issues are part of negotiations to avert a package of automatic deep spending cuts and across-the-board tax hikes that will kick in on Jan. 2, unless lawmakers can reach an alternative deficit-reduction plan. Failure to reach compromise could thrust the U.S. economy back into recession, economists say.
Both sides agree on the need to extend current income tax rates for 98 percent of Americans, but Republicans have opposed decoupling the middle-class tax cuts from a broader legislative package.
“We’re just waiting for Republicans in the House,” Obama said. The Senate passed a middle-class tax cut extension earlier this year. “But so far, they’ve put forward an unbalanced plan that actually lowers rates for the wealthiest Americans. If we want to protect the middle class, then the math just doesn’t work.”
House Speaker John Boehner disputes Obama’s rationale. “There are a lot of things that are possible to put the revenues that the president seeks on the table,” he said Friday. “But none of it’s going to be possible [if] the president insists on his position, insists on ‘my way or the highway,’”
There are no meetings planned between Obama and Boehner, the two principle negotiators in any potential deal, according to aides. Both men last spoke on Thursday, in a conversation Boehner described as “pleasant” but “just more of the same.”
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