Obama: I won’t relent on tax demand

Caption
(AP file photo)
President Barack Obama shakes hands Nov. 16 with House Speaker John Boehner of Ohio in the Roosevelt Room of the White House in Washington, during a meeting to discuss the deficit and economy. Congress and the White House can significantly soften the initial impact of the fiscal cliff even if they fail to reach a compromise by Dec. 31. One thing they cannot control, however, is the financial markets' reaction, which possibly could be a panicky sell-off that triggers economic reversals worldwide.

REDFORD, Mich. – President Barack Obama warned Monday that he “won’t compromise” on his demands that the wealthiest Americans pay higher tax rates, digging in on the chief sticking point between the White House and Republicans as they seek a way to avert the “fiscal cliff.”

Obama brought his pressure-Congress campaign to the heart of industrial America, ripping lines from his own re-election bid as the nation inched closer to a perilous economic cliff. He said the country couldn’t afford a “manufactured” crisis and pledged to cheering auto workers that he would fight to extend tax cuts for the middle class before they expire at year’s end.

“That’s a hit you can’t afford to take,” Obama declared.

Obama’s campaign-style trip to Michigan came one day after he and House Speaker John Boehner met privately at the White House. While neither side would characterize the meeting, the mere fact that the two leaders talked face to face was seen as progress in negotiations to avoid a series of year-end tax hikes and spending cuts.

Republicans have long opposed Obama’s call for higher tax rates on the wealthy, but some GOP lawmakers are suggesting the party relent on taxes to win concessions from the president on changes to benefit programs such as Medicare. Still, Boehner’s office indicated Monday that the speaker wasn’t ready to take that step.

“The Republican offer made last week remains the Republican offer,” said Brendan Buck, a Boehner spokesman. He was referring to a GOP plan that offered $800 billion in new revenue over the next decade through reducing or eliminating unspecified tax breaks on upper-income earners, but not by raising tax rates.

In Michigan, Obama was more restrained in his remarks, never directly criticizing Republicans and keeping his focus more broadly on the need for Congress to act quickly to prevent a tax increase for middle class families. During his last trip outside of Washington, D.C. – to a toy factory in Pennsylvania on Nov. 30 – the president likened raising taxes on the middle class to a “lump of coal” for Christmas, a “Scrooge Christmas.”

Obama saved his most pointed criticism for closely-watched measures in the state legislature that would prevent requiring non-union employees to financially support unions at their workplace. Drawing cheers, the president said the right-to-work legislation was more about politics than economics. “What they’re really talking about is giving you the right to work for less money,” Obama said.

At the Daimler Detroit Diesel plant, Obama hailed the company’s plans to spend an additional $100 million to boost production in the U.S. He noted the importance of the auto industry’s supply chain nearly four years after the government rescued carmakers General Motors and Chrysler.

White House press secretary Jay Carney, speaking to reporters traveling with Obama, reiterated that there could be no deal on the fiscal cliff without tax rate increases on the wealthiest Americans. But he said the president remains optimistic that both sides can reach an agreement.

“He’s eager to get a deal and he believes a deal is possible,” Carney said.

Obama’s plan would raise $1.6 trillion in revenue over 10 years, partly by letting decade-old tax cuts on the country’s highest earners expire at the end of the year. The president wants tax rates to rise on incomes over $200,000 for individuals and $250,000 for couples. Individuals earning more than $200,000 and couples making more than $250,000 would see their top rates rise from 33 percent and 35 percent to 36 percent and 39.6 percent, respectively.

Boehner’s plan, in addition to calling for $800 billion in new revenues, also would cut spending by $1.4 trillion, including by trimming annual increases in Social Security payments and raising the eligibility age for Medicare from 65 to 67.

The White House is trying influence the process with the public’s help. The president’s re-election campaign emailed supporters Monday, asking them to call their representatives and urge them to back Obama’s fiscal cliff plan, even suggesting a script they could read.

It was the latest example of the White House trying to put its massive voter database to use during the fiscal cliff negotiations in the same way it did during the presidential campaign.

Business leaders, meanwhile, emphasized the need to reach an agreement before year’s end, raising the costs of creating uncertainty in the marketplace.

“The millions of people that work for us, their lives are in flux. And this is incredibly critical we get this done now,” said Jeffrey Immelt, GE’s chief executive and head of the presidential advisory council on competitiveness, in remarks aired Monday on “CBS This Morning.”

GOP mavericks are putting increased pressure on their party’s leaders to rethink how they approach negotiations with Obama in the wake of a bruising national election that left Democrats in charge of the White House and Senate. Sen. Bob Corker, R-Tenn., told “Fox News Sunday” that if Republicans agree to Obama’s plan to increase rates on the top 2 percent of Americans, “the focus then shifts to entitlements, and maybe it puts us in a place where we actually can do something that really saves the nation.”

But such ideas face an uphill battle. Many House Republicans say they wouldn’t vote for tax rate hikes under any circumstances. And GOP leadership could lose leverage in the negotiations if it raises the rate on upper-income earners without getting anything substantial in return like entitlement reform.

Democratic leaders have suggested they are unwilling to tackle entitlement spending in the three weeks left before the fiscal cliff is triggered.

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