WASHINGTON (AP) -
In a challenge to Republicans, President
Barack Obama urged Congress on Wednesday to extend expiring tax cuts
immediately for all but the nation's highest income earners as a way to
eliminate half of the so-called "fiscal cliff" that threatens to send
the economy back into recession.
"What I'm not going to do
is to extend Bush tax cuts for the wealthiest 2 percent that we can't
afford and according to economists will have the least positive impact
on the economy," the president said at his first news conference since
his re-election last week.
Standing in the East Room
of the White House, Obama pointedly noted he had campaigned on a
platform that called for allowing tax breaks to expire as scheduled on
Dec. 31 for the wealthiest income earners.
"A modest tax increase on the wealthy is not going to break their backs," Obama said. "They'll still be wealthy."
House Speaker John Boehner
and Senate Republican leader Mitch McConnell have both said they are
eager to compromise with the president to avoid the immediate tax
increases and spending cuts scheduled to take effect at the end of the
year. But at the same time, they have said they won't agree to raise tax
rates for the wealthy.
Boehner arranged a late
afternoon news conference in the Capitol to respond to the president's
remarks. The congressional leaders are slated to meet with Obama at the
White House on Friday for the first time since the election, and are
expected to agree to designate aides to begin the search for a
compromise.
Obama met on Tuesday with
allies from labor and liberal groups, and invited a group of CEOs to the
White House for a mid-afternoon session, also to focus on the threat
posed to the economic recovery by the combination of tax increases and
spending cuts.
At the news conference, he
laid out a two-step process for an overall compromise - immediate
extension of all the expiring tax cuts except the top rate, followed by a
comprehensive agreement in 2013 to overhaul the tax code and the
government's big benefits programs, which include Medicare, Medicaid and
Social Security.
Obama signed legislation two years ago extending the Bush tax cuts in their entirety after saying he wouldn't.
Asked why this time will be
different, he said, "what I said at the time was what I meant, which is
that this was a one-time proposition."
Now, he said, legislation
that keeps most of the cuts in place but not those for the upper-income
earners would be "actually removing half the fiscal cliff."
Asked if he viewed it as a
deal-breaker if Republicans refused to allow the top tax rate to revert
to 39 percent from the current 36 percent, he said, "I just want to
emphasize I am open to new ideas if the Republican counterparts or some
Democrats have a great idea for us to raise revenue, maintain
progressivity, make sure the middle class isn't getting hit, reduces our
deficit.'"
White House press secretary
Jay Carney said the president would bring to the table a proposal for
$1.6 trillion in new taxes on business and the wealthy when he begins
discussions with congressional Republicans, a figure that Obama outlined
in his most recent budget plan. The targeted revenue is twice the
amount Obama discussed with Republican leaders during debt talks during
the summer of 2011.
Carney said the figure,
combined with $1.1 trillion in spending cuts already signed into law,
would reduce deficits by $4 trillion.
Earlier, Sen. Dick Durbin
of Illinois, part of the Democratic leadership team, said that many
"many Republicans believe now is the time to sit down and talk more
revenue." Durbin said the number of GOP lawmakers in the Senate willing
to work toward accommodation now totals 20.
But Durbin also said "there
is a great distance" between Republicans in the House and Senate, "and
basically it comes down to the question of whether Speaker Boehner is
willing to look for a bipartisan solution."
Durbin told MSNBC he thinks
lawmakers should "use this fiscal cliff" to resolve a problem that has
plagued Congress for four years.
The president pledged to
raise taxes on the rich during his first term but backed off his stance
in late 2010 after Republicans seized control of the House in the
midterm election. During his meeting with labor leaders, Obama said he
was not going to bend on letting tax cuts expire for top wage earners,
according to a participant in the meeting who spoke on the condition of
anonymity to discuss the private session. The president said the tax
issue was clear during the election and said he had extended those
enacted during the George W. Bush administration once and would not do
so again, the participant said.
The CEOs have urged
Congress to extend the Bush-era tax cuts until a tax overhaul can be
reached and prevent the spending cuts from taking place. The executives
say the uncertainty over the fiscal cliff is hurting the nation's
business climate and preventing hiring.
Obama will meet with several CEOs, including the heads of Aetna, Honeywell, Wal-Mart, Procter & Gamble and Ford.
The participants include
members of the Campaign to Fix the Debt, a group founded by Alan Simpson
and Erskine Bowles that has pushed for a long-term plan to fix the
nation's debt and deficits.
Simpson, a former Wyoming
senator, and Bowles, a former White House chief of staff, served as
co-chairs of Obama's bipartisan National Commission on Fiscal
Responsibility and Reform, which proposed $3 in spending cuts for every
$1 in additional revenues.
Among the CEOs attending
the meeting are General Electric CEO Jeff Immelt, who chairs Obama's
jobs council, and American Express CEO Kenneth Chenault and Xerox CEO
Ursula Burns, who are members of the council.
