Following the House vote that averted the “fiscal cliff” Tuesday night by raising taxes on the wealthy, President Obama warned lawmakers that he quickly will seek more tax revenue from high earners and corporations and that he won’t bargain in an impending battle over raising the nation’s borrowing limit.
While Republicans in Congress say the spending cuts that were missing from this week’s agreement must feature prominently in the next fiscal deal, Mr. Obama said future bargains must meet his definition of “balance.”
“Cutting spending has to go hand in hand with further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans,” Mr. Obama said in a late-night appearance in the White House press briefing room. “We can’t simply cut our way to prosperity.”
After making his statement, Mr. Obama then departed on Air Force One overnight for Hawaii, where he rejoined his family to complete the vacation that was interrupted by the last-minute fiscal negotiating.
The legislation approved by the House late on New Year's Day combines $330 billion in new spending with $3.6 trillion in extended tax breaks for most Americans, but a tax increase on the wealthiest wage earners. It raises tax rates for individuals earning more than $400,000 per year and families earning more than $450,000.
Taxpayers below those thresholds will keep their income tax cuts, although most taxpayers will see a tax increase this week because of the expiration of a 2 percent payroll tax cut.
House Republicans voted nearly 2-to-1 against the bill, arguing that it includes too much new spending and tax increases without any deficit reduction. The legislation adds about $4 trillion in deficits over the next decade.
Speaker John A. Boehner, Ohio Republican, who voted for the deal, said spending still needs to be addressed.
“The federal government has a spending problem that has led to a $16 trillion national debt that threatens our country’s future,” Mr. Boehner said. “The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the ‘balanced’ approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.”
The bill’s approval came less than 48 hours before a new Congress is sworn in on Thursday.
Mr. Obama said the agreement “enshrines … a principle into law that will remain as long as I am president: The deficit needs to be reduced in a way that’s balanced.”
“Everyone pays their fair share,” Mr. Obama said. “Everyone does their part. That’s how our economy works best. That’s how we grow. We can’t keep cutting things like basic research and new technology and still expect to succeed in a 21st-century economy.”
The president said he’s willing to consider cuts in Medicare as part of the next fiscal deal, which will come to a head within two months as the federal government bumps up against its legal borrowing limit of $16.4 trillion.
The government technically already has hit that limit, but the Treasury Department is taking steps to postpone the day of reckoning until late February or early March.
The president said he won’t tolerate a battle over the debt ceiling like the one he waged with House Republicans in the summer of 2011, a feud that damaged the nation’s credit rating and spooked financial markets.View Entire Story
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Dave Boyer is a White House correspondent for The Washington Times. A native of Allentown, Pa., Boyer worked for the Philadelphia Inquirer from 2002 to 2011 and also has covered Congress for the Times. He is a graduate of Penn State University. Boyer can be reached at firstname.lastname@example.org.
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