WASHINGTON – President Obama Friday insisted on higher taxes for the wealthy as part of a package aimed at averting the looming “fiscal cliff,” but judging from what top Republicans and local members of Congress have to say, coming up with such a deal will be anything but easy.
House Speaker John Boehner, R-Ohio, quickly threw cold water on Obama’s notion of raising taxes on the rich.
And in addition to disagreeing on how to avert huge automatic tax increases and spending cuts set to take effect Jan. 1, local lawmakers – including Rep.-elect Chris Collins, R-Clarence – can’t even exactly agree on when the problem should be dealt with, much less how.
At issue is a series of tax cuts, dating back to the George W. Bush administration, that are set to expire on Jan. 1, along with a massive round of automatic spending cuts set to take effect the very same day.
In his first appearance since a resounding electoral victory over Republican Mitt Romney on Tuesday, Obama spoke in the White House East Room on Friday, saying a freeze on middle-class tax rates would have to be part of any fiscal-cliff deal. But he also laid down a marker in the congressional tax and budget negotiations that will dominate the upcoming four-week lame-duck session of Congress.
“We have to combine spending cuts with revenue, and that means asking the wealthiest Americans to pay a little more in taxes,” he said
The president’s proposal would keep taxes just as they are for 98 percent of taxpayers, but he said the public wanted higher rates on the other 2 percent.
“This was a central question during the election,” Obama said. “The majority of Americans agree with my approach.”
Although Obama said he is “open to compromise,” his spokesman, Jay Carney, later buttressed the president’s argument, saying Obama would veto any bill that extended the Bush tax cuts for families that earn more than $250,000.
The talk out of the White House didn’t sit well, though, with Boehner. “Those increased tax rates will destroy jobs in America by hurting small businesses across the country,” he said.
If the Bush-era tax rates are allowed to expire, the top tax rate would go from 35 percent to 39.6 percent – the rate that higher-income wage earners paid during the Clinton administration.
And to hear many Democrats talk, that would not necessarily be a bad thing,
“The president’s view, my view and the overwhelming view that we ran on, and succeeded on, and the exit polls show that the American people agreed with us on, is let the rate go to 39.6 [percent] for the highest-end people,” said Sen. Charles E. Schumer, D-N.Y.
Republicans said, though, that any increase in rates would have great difficulty in passing the Congress, and particularly the GOP-controlled House of Representatives. “What’s needed now is a realistic and specific proposal from the president that can actually pass the Congress,” said Sen. Mitch McConnell of Kentucky, the Republican minority leader. “For the last two years, the president avoided outlining these kinds of realistic solutions.”
Republicans have agreed to raise revenues through a rewrite of the tax code that eliminates deductions, while insisting that the top rate must not go up. They also are insisting that any big budget and tax package include a reform of programs such as Medicare, whose cost is expected to spiral as the population ages.
Among local lawmakers and Collins, though, there was little consensus on the outline of such a deal, or the timing of it.
While agreeing with other Democrats that the top tax rate must be increased, Rep. Brian Higgins, D-Buffalo, said he wanted a comprehensive agreement by the end of the year along the lines of that proposed by a commission headed by former Sen. Alan Simpson, R-Wyo., and Democratic budget hawk Erskine Bowles.
“I’m tired of supercommittees and all this nonsense,” Higgins said, noting that Obama and Boehner set a framework for a budget compromise last year that could be used to come up with a fresh deal. “Congress just has to do its work.”
But Rep. Tom Reed, a member of the tax-writing House Ways and Means Committee, said a two-step approach would be best, with Congress coming up with a budget deal to avoid the Jan. 1 fiscal cliff while deferring comprehensive tax reform until 2013.
“I’m open to additional revenues in terms of cleaning up the deductions and streamlining the tax code,” said Reed, R-Corning, who has signed on to a bipartisan budget compromise modeled on Simpson-Bowles.
Collins, meanwhile, proposed a six-month extension of current tax rates to give Congress time to devise comprehensive tax reform.
“You’ve got Thanksgiving and Christmas coming up, so I don’t think there’s time” to strike a comprehensive deal this year, Collins said.
Rep. Kathleen C. Hochul, a Hamburg Democrat who lost to Collins in Tuesday’s election, agreed that it would be difficult to reform the tax code in four weeks. She remembered working on tax reform for a year before it passed when she worked for then-Sen. Daniel Patrick Moynihan, D-N.Y., in the late 1980s.
But next year, she said, Congress ought to devise a long-term solution to its tax problems. After years of kicking the can down the road, “now it’s time to pick up the can and fix it,” she said.
News wire services contributed to this report.