Updated at 3:46 p.m. ET; Original Post at 10:50 a.m.
DETROIT – If President Obama and House Speaker John Boehner are making any progress towards a “fiscal cliff” deal, Obama didn’t hint at it today during his campaign-style stop in suburban Detroit.
“If Congress doesn’t act soon, meaning in the next few weeks, starting on January 1st, everybody’s going to see their income taxes go up,” he said drawing boos from the crowd. “It’s true. You all don’t like that.”
“And by the way, that’s not a good hit for businesses either,” he said. “Consumer spending is going to go down. That means you got less customers. Businesses get fewer profits. They hire fewer workers. You go in a downward spiral.”
Obama made the comments to a group of union workers in conjunction with a tour of the Detroit Diesel Corp. engine facility, owned by Germany-based Daimler. The company planned to announce a $100 million investment in expanded U.S. production and new jobs. The president has been often on the road since his reelection to pressure Republicans back in Washington to accept higher tax rates for wealthy Americans.
Obama is using the trip to highlight the jobs news as a bright spot in uncertain economic times, while trying to bolster his image as a “warrior for the middle class.” Before a backdrop of auto workers, Obama will renew his push to extend for 98 percent of Americans the current tax rates which are set to expire at the end of the year.
But even as the president has carried on with his public pressure, there are some signs of progress back in Washington. The president met with Boehner in person for the first time in 23 days to discuss the fiscal cliff on Sunday. There was no apparent resolution, but the two camps issued the same statement afterward.
At Monday’s event in Detroit there was another potential sign of progress: Obama dialed back his criticism of Republicans compared with other recent appearances on the “Cliff,” only mentioning the word ‘Republican’ twice in the entire 23 minute speech. He made no mention of their reluctance on tax rates or demands on entitlements.
“Here’s the good news,” Obama said of the Cliff’s looming impact on the middle class. “We can solve this problem. All Congress needs to do is pass a law that would prevent a tax hike on the first $250,000 of everybody’s income. Everybody — that means 98 percent of Americans and probably a hundred percent of you — 97 percent of small businesses wouldn’t see their income taxes go up a single dime.
“Everybody says they agree with it; let’s get it done,” he said.
Republican and Democratic lawmakers agree on the extension for Americans making less than $250,000 per year, but its passage has become entangled in the broader “cliff” debate. Unless Obama and Republicans reach a deficit-reduction deal by Dec. 31 to avert a looming package of automatic tax hikes and deep spending cuts, the average American middle-income family could see taxes rise by more than $2,000 next year.
Some Republicans have begun showing flexibility about approving higher tax rates for upper-income earners – a key demand of Obama and Democrats – but only in exchange for more significant cuts to entitlement program spending than those proposed by the White House.
“We don’t have a lot of cards as it relates to the tax issue before year’s end,” said Republican Sen. Bob Corker of Tennessee on “Fox News Sunday.” “So a lot of people are putting forth a theory, and I think it has merit, where you go ahead and give the president… the rate increase on the top 2 percent, and all of the sudden the shift goes back to entitlements.”
White House legislative affairs chief Rob Nabors and Boehner chief of staff Mike Sommers are expected to meet behind closed doors later today in Washington to continue staff-level talks.
Officials in Detroit said Daimler’s announcement would make Daimler Trucks North America the first heavy-duty truck company in the U.S. to produce the engine, axles and transmission all in one place. It is expected to lower manufacturing costs and consumer prices, and improve fuel efficiency.