Obama Stays Firm on Taxes as He Offers Budget Cooperation
President Barack Obama extended an offer of cooperation rather than confrontation with congressional Republicans over taxes and the budget in a speech a day after he met with House Speaker John Boehner.
As he promoted his plan to avoid more than $600 billion in automatic tax increases and spending cuts set to begin in January, Obama said he’s ready to make a deal with Republicans. Still, he held firm on his proposal to let tax rates rise on top earners as the first part of any agreement.
“Let’s get it done,” he said before an audience of workers at a plant owned by Daimler AG (DAI)’s Detroit Diesel unit in Redford, Michigan. “I will work with the Republicans on a plan for economic growth, job creation and reducing our deficits.”
The factory visit was the latest in a series of Obama moves designed to rally popular support for the White House’s position in the negotiations and pressure Republicans into compromising on a deal.
His rhetoric marked a shift from recent statements about negotiations with congressional Republicans. At a similar outing Nov. 30 at a toy factory in Pennsylvania, he accused “a handful of Republicans” of holding middle-income tax breaks “hostage simply because they don’t want tax rates on upper-income folks to go up.”
The change coincides with an acceleration of private meetings and discussions with the clock ticking down on the deadline for a deal.
In addition to the private White House meeting yesterday with Boehner, Obama called Senate Majority Leader Harry Reid, a Nevada Democrat, from Air Force One today to discuss the status of the budget talks, according to a Senate Democratic aide who spoke on condition of anonymity because the talks were private.
White House press secretary Jay Carney refused to characterize the talks between Obama and Boehner, saying it’s in the “best interests” of both sides not to negotiate in public. Carney said Republicans still haven’t delivered details about how they would raise revenue.
“He’s eager to get a deal and he believes a deal is possible,” Carney said of the president.
Boehner’s spokesman, Michael Steel, said that discussions between the speaker’s office and the White House are taking place without providing further details. Steel said the $2.2 trillion deficit-reduction plan remains the Republican offer on the table.
“We continue to wait for the president to identify the spending cuts he’s willing to make as part of the ‘balanced’ approach he promised the American people,” Steel said in a statement.
Polls show most Americans support Obama’s call to let tax rates rise for married couples with incomes of more than $250,000 a year. A Politico/George Washington University survey conducted Dec. 2-6 showed 60 percent support that position. Three-quarters also backed cutting government spending across the board.
While Obama and the White House’s bargaining team insist on raising tax rates for the nation’s highest earners, they aren’t demanding the precise 39.6 percent top rate spelled out in the president’s budget. In the past few days, Republican congressional leaders have reiterated their opposition to rate increases without explicitly ruling them out.
It’s possible to chart an arithmetic compromise in the negotiations aimed at averting automatic tax increases and spending cuts set to take effect Jan. 1. It could contain about $1.2 trillion in new revenue and $1 trillion in spending cuts, midway between the two sides’ initial offers.
The top income tax rate could be set at 37 percent or 38 percent, between the current 35 percent and the 39.6 percent rate that will return in 2013 if Congress does nothing. Both parties could accept down payments of revenue and spending cuts in 2013 and overhaul the tax code and entitlement programs next year.
Representative Jim McDermott, a Washington Democrat, said today that Boehner needs to talk with House Minority Leader Nancy Pelosi, a California Democrat, about what kind of bill can gain enough Democratic votes to pass.
“Unless that goes on, you’re not going to get a full package here,” McDermott said at an event in Washington sponsored by Politico.
U.S. stocks advanced. The Standard & Poor’s 500 Index (SPX) rose less than 0.1 percent to 1,418.57 at 4 p.m. New York time. Treasury 10-year notes were little changed at 1.62 percent at 3:44 p.m. in New York, according to Bloomberg Bond Trader prices.
Obama also waded into a state political battle between unions and Republicans in Michigan’s legislature.
His visit to the Detroit suburb comes as state Republicans put the final touches on legislation that would prohibit compulsory payment of union dues. The measure, which was passed by Republicans who control the statehouse on Dec. 6, is staunchly opposed by labor unions. The final version is expected to be signed soon by Governor Rick Snyder, a Republican. The president voiced his opposition to the bill today, telling auto workers that the legislation had no economic benefit for either workers or the country.
“What they’re really talking about is to give you the right to work for less money,” Obama said.
Backing from auto workers and labor unions helped Obama win the competitive states of Michigan and Ohio in last month’s election and their support is a crucial part of Obama’s strategy to get his second term agenda through Congress.
Timed to the president’s speech, Daimler today announced a new investment of $120 million that will create 115 new jobs at the plant.
“Companies like Daimler know we’re still a smart bet,” said Obama. “They could have made their investments somewhere else but they didn’t.”
To contact the reporter on this story: Lisa Lerer in Redford, Michigan at email@example.com
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