Obama says he'll do what it takes to avoid cliff

Associated Press Modified: November 28, 2012 at 6:46 pm •  Published: November 28, 2012
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Those negotiations faltered in a hail of recriminations after the president upped his demand for additional tax revenue and conservatives balked. At the same time liberals were objecting to savings from Medicare and Social Security.

Now, more than a year and one election later, Obama has said repeatedly he is open to alternatives to his current proposal to raise additional tax revenue. But he also says he will refuse to sign legislation that extends the current top rates on incomes over $200,000 for individuals and $250,000 for couples.

Instead, he is pushing Congress to renew expiring tax cuts for all income below those levels as an interim measure — an offer Boehner and Republicans generally say is unacceptable because it would mean higher taxes on small business owners.

Bowles said during the day that Obama might be willing to back off his demand that the top rate revert all the way from 35 percent to 39.6 percent, where it was a decade ago before tax cuts sought by then-President George W. Bush took effect.

At the White House, spokesman Jay Carney sidestepped questions. "If I told you how much flexibility the president had, it would eliminate his flexibility," he said.

He noted that Obama has said he will listen to alternatives, but the spokesman said, "The most basic, simplest, most efficient way to achieve that revenue target is by returning the rates for top earners back to those that were in place in the Clinton era," when the top rate on personal income was 39.6 percent.

The goal of the talks is to produce a long-term deficit-cutting deal that will allow the cancellation of tax increases and spending cuts scheduled for the end of the year that numerous economists say threaten a new recession.

While the obstacles are numerous, there are other political imperatives pushing the two sides toward an agreement.

Unemployment benefits expire for some of the long-term jobless at the end of the year. Additionally the government is expected to need an increase in borrowing authority early next year or face the possibility of a default. Any agreement on that is expected to raise the current $16.4 trillion level.

Obama wrapped up the day by meeting with CEOs from about a dozen corporations, many of whom came away optimistic that an agreement could be reached that would help the economy.

"They feel like this can be done if there is a willingness on the other side to get in a room and do it," said Arne Sorenson, Marriott's president and CEO, who called Obama's approach "resoundingly reasonable."

Sorenson said he urged the president and his team to "do as much as you possibly can now. Don't just talk about down payments, small down payments that leave the uncertainty hanging out over 2013. Because I think the uncertainty would be a threat to the economy."

___

Associated Press writers Andrew Taylor, Jim Kuhnhenn and Ken Thomas contributed to this report.



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