Pressuring GOP, Obama takes his fiscal plan to Pa.

JIM KUHNHENN

Asso­ci­ated Press

HATFIELD, Pa. — Pres­i­dent Barack Obama argued Fri­day that allow­ing taxes to rise for the mid­dle class would amount to a “lump of coal” for Christ­mas, while Repub­li­can House Speaker John Boehner declared that nego­ti­a­tions to sur­mount a loom­ing fis­cal cliff are going “almost nowhere.”

Obama took his case to an audi­ence in a Philadel­phia sub­urb, say­ing that this move would present a “Scrooge Christ­mas” for mil­lions of wage-earners. Speak­ing at a toy fac­tory, the pres­i­dent said Repub­li­cans should extend exist­ing Bush-era tax rates for house­holds earn­ing $250,000 or less, while allow­ing increases to kick in for the wealthy.

On Capi­tol Hill, Boehner argued that Obama’s lat­est offer — to raise rev­enue by $1.6 tril­lion over the next decade — would be a “crip­pling blow” to an econ­omy that is still strug­gling to find its foot­ing. The Ohio Repub­li­can told reporters he would con­tinue work­ing with Obama to avoid hun­dreds of bil­lions in tax increases and spend­ing cuts that will take effect begin­ning in Jan­u­ary if Wash­ing­ton doesn’t act to stop it, but gave a gloomy assess­ment of the talks so far.

“There’s a stale­mate. Let’s not kid our­selves,” Boehner said. “Right now, we’re almost nowhere.”

Obama’s speech came a day after his admin­is­tra­tion pro­posed nearly $1.6 tril­lion in new tax rev­enue over 10 years, $600 bil­lion in sav­ings from changes in manda­tory spend­ing pro­grams includ­ing Medicare, and $200 bil­lion in spend­ing rang­ing from pub­lic works projects to help for the unem­ployed and strug­gling home­own­ers, accord­ing to admin­is­tra­tion officials.

Repub­li­cans rejected the offer as unrea­son­able. Repub­li­cans have said they are open to new tax rev­enue but not higher rates.

Obama said he believed both par­ties “can and will work together” to reach an agree­ment to get its long-term deficit under con­trol “in a way that’s bal­anced and is fair.”

Obama spoke at the Rodon Group man­u­fac­tur­ing facil­ity, show­cas­ing the com­pany as an exam­ple of a busi­ness that depends on middle-class con­sumers dur­ing the hol­i­day sea­son. The com­pany man­u­fac­tures parts for K’NEX Brands, a con­struc­tion toy com­pany whose prod­ucts include Tin­ker­toy, K’NEX Build­ing Sets and Angry Birds Build­ing Sets. The road trip was part of a dual White House strat­egy of hav­ing the president’s team meet with mem­bers of Con­gress while Obama trav­els the coun­try to pres­sure Con­gress to act.

The pres­i­dent joked that he’s keep­ing his own “naughty and nice list” for mem­bers of Con­gress — and only some would get a K’NEX set for Christmas.

Admin­is­tra­tion offi­cials said the White House offer, pre­sented to Hill Repub­li­cans by Trea­sury Sec­re­tary Tim Gei­th­ner, con­sti­tuted much of what Obama has pre­vi­ously sug­gested in bud­get pro­pos­als and dur­ing the campaign.

Under the administration’s plan, the new tax rev­enue would include $950 bil­lion gen­er­ated by rais­ing taxes on fam­i­lies with incomes over $250,000 and by clos­ing cer­tain tax loop­holes. The remain­der would be achieved through an over­haul of the tax sys­tem next year and would not become effec­tive until 2014.

The pro­posal, which the admin­is­tra­tion has also described to busi­ness and labor lead­ers, would require Con­gress and the White House to iden­tify a “down pay­ment” of cuts and tax loop­hole clos­ings by the end of this year that would buy Con­gress and the pres­i­dent time to nego­ti­ate a tax over­haul and changes in enti­tle­ment pro­grams between now and Aug. 1.

One new fea­ture in the Gei­th­ner plan is a call for increas­ing the nation’s debt limit with­out the need for con­gres­sional approval. Under last year’s debt ceil­ing deal, Obama sim­ply had to notify Con­gress that he was rais­ing the debt ceil­ing, a move that could be blocked only if both houses of Con­gress passed res­o­lu­tions of dis­ap­proval that Obama could veto. The admin­is­tra­tion wants a per­ma­nent exten­sion of the debt ceil­ing with a sim­i­lar leg­isla­tive arrange­ment and with no off­set­ting spend­ing cuts, as demanded by Republicans.

One admin­is­tra­tion offi­cial said Obama’s must-have posi­tions are expi­ra­tions of the Bush era tax cuts for high earn­ers and the inclu­sion of the debt limit in the deal. The offi­cials spoke on the con­di­tion of anonymity because he was not autho­rized to describe pub­licly the state of negotiations.

By count­ing $1 tril­lion in spend­ing cuts agreed to last year, claim­ing $800 bil­lion saved this year and over the next decade because of troop draw­downs in Iraq and Afghanistan and esti­mat­ing $600 bil­lion in lower inter­est pay­ments on the national debt, the admin­is­tra­tion places its total deficit reduc­tion over 10 years nearly $4.4 trillion.

Posted by AP News on Nov 30 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.