A day after a “productive meeting” with congressional leaders on potential ways to prevent automatic tax hikes and federal spending cuts from kicking in next year, President Obama urged Congress to swiftly pass legislation that prevents income taxes from going up on those earning $250,000 or less “so we can give families and businesses some good news going into the holiday season.”
Absent action from Congress, the George W. Bush-era tax cuts will expire at the end of this year and deep federal spending cuts will kick in starting early next year — a combination that economists warn could trigger another recession.
Mr. Obama said nobody wants to see everybody’s taxes go up and that neither the American people nor the economy can afford it right now. He reiterated the tax plan he campaigned on — let rates on income higher than $250,000 increase from 35 percent to 39.6 percent and preserve current rates on earned income below that threshold.
“We shouldn’t hold the middle class hostage while Congress debates tax cuts for the wealthy,” Mr. Obama said in his weekly address. “Let’s begin our work by actually doing what we all agree on. Let’s keep taxes low for the middle class.”
While Mr. Obama and congressional leaders in both parties reported progress from a meeting at the White House Friday to discuss potential solutions to avert the “fiscal cliff,” neither side appears willing to budge on the issue of tax rates.
Sen. Kelly Ayotte, New Hampshire Republican, said in the Weekly Republican Address that tax reform that closes loopholes and eliminates wasteful preferences makes more sense than raising tax rates, and top Republican leaders have said that any increases in tax rates would harm the economy and should not be part of a fix to the country’s current financial woes.
But Mr. Obama said both sides agree that cooperation must be part of any solution.
“[E]veryone agreed that while we may have our differences, we need to come together, find solutions and take action as soon as possible,” he said. “Because, if anything, that’s the message I heard loud and clear in the election. Work as hard as you can to make our lives better. And do it together. Don’t worry about the politics. Just get the job done.”
“Every single day, the good people of this country work as hard as you can to meet your responsibilities,” he continued. “Those of us you sent to Washington are going to do the same.”