
President Barack Obama insisted Congress to prolong the expiring tax cuts soon for all in a challenge with the Republicans, excluding the nation’s top income earners so as to eliminate almost half of the fiscal cliff, which is threatening the economy to send it back to recession.
Obama, at his first news conference after his re-election, said that he will not extend Bush tax cuts for the 2% wealthiest people for whom they cannot afford.
Obama noted that he had fought on a platform that demanded allowing tax cuts to end on December 31 as scheduled for the highest income earners.
He said that a small increase in tax on the wealthier people will not make any change and still they’ll be wealthy.
Mitch McConnell, Senate Republican leader and House Speaker John Boehner are willing to comprise with Obama to avoid the spending cuts and instant tax increases, planned to take effect by the year end. However, they said that they are against the increase in tax rates for the wealthier people.
The congressional leaders are likely to meet with the president on Friday at the White House for the first time after the election. They are likely to agree to select aides to start the lookup for a compromise.
Obama met with allies from liberal and labor groups on Tuesday. He also invited CEOs for a mid-afternoon session at the White House to concentrate on the menace set to the economic recovery by spending cuts and tax increases.
In the conference, he presented a 2-step process for comprise- one is an immediate extension of tax cuts except for the wealthy and the other is an inclusive agreement in 2013 to renovate the government’s benefit programs such as Medicare, Social security, and Medicaid and also to renovate the tax code.
Obama said that he is ready for new ideas from the Democrats and Republican counterparts to the government to increase revenue, sustain progressivity, reduce their deficit, and ensure that the middle class won’t get hurt.
Jay Carney, White House press secretary said that the president is likely to bring to the table an offer for $1.6 trillion in new taxes on the wealthy and on businesses when he starts discussions with Republicans. This figure was outlined by Obama in the latest budget plan.
Carney said that this figure together with $1.1 trillion in spending cuts might reduce arrears by $4 trillion.
Obama will meet with most of the CEOs, including the heads of Honeywell, Procter & Gamble, Aetna, Wal-Mart, and Ford, and it’d be very interesting to see the outcome of those discussions.