Obama: Compromise —but not on tax cuts for rich

BEN FELLER

AP White House Correspondent

WASHINGTON — An eco­nomic calamity loom­ing, Pres­i­dent Barack Obama on Fri­day 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.

Posted by AP News on Nov 9 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.