Obama says tax hike will have to come first in "fiscal cliff" deal

Wed Nov 14, 2012 5:48pm EST
 

By Andy Sullivan

WASHINGTON (Reuters) - President Barack Obama said on Wednesday that Republicans would have to agree to raise taxes on the wealthy as the first step in a budget deal that would prevent a dysfunctional Washington from pushing the economy into recession.

In his first news conference since winning re-election last week, Obama said he would be open to considering Republican priorities like entitlement reform and a tax-code overhaul as part of a broad-based deal to get the nation's finances on a sustainable course.

But Obama said Republicans in Congress would first have to agree to his top priority in the complex negotiations aimed at preventing a $600 billion combination of tax increases and spending cuts known as the "fiscal cliff" that could halt the weak economic recovery at the beginning of next year.

"What I'm not going to do is to extend further a tax cut for folks who don't need it," Obama said, shortly before meeting with a dozen business leaders who are pushing policymakers to reach a deal.

Obama's remarks, and unyielding comments from Republican leaders earlier this week, begin a long and possibly tense period of bargaining and brinkmanship that could leave a cloud of uncertainty over the economy leading up to the Christmas holidays and beyond.

Both Republicans and Democrats want to keep low income tax rates in place for middle-income and low-income households, but Democrats say the wealthiest 2 percent should have to pay the higher rates that were in place in the 1990s.

Obama made increased taxes on the wealthy a centerpiece of his re-election campaign, and polls show public opinion is on his side. Obama is reaching beyond Washington to ramp up pressure on Republicans and has already met with labor and liberal groups to build support for his approach.

Several of the chief executives due to meet Obama on Wednesday, including General Electric Co.'s Jeff Immelt, Aetna Inc.'s Mark Bertolini, Honeywell International Inc.'s David Cote and Dow Chemical Co.'s Andrew Liveris, back an approach roughly in line with Obama's position.   Continued...

 
U.S. President Barack Obama speaks to military fathers and their children before watching the latest Disney/Pixar movie, "Cars 2," in the South Court Auditorium in the Eisenhower Executive Office Building on the White House complex in Washington, June 15, 2011. REUTERS/Larry Downing