By Nick Mann | 12 November 2012
The US Congress should immediately renew ‘middle class’ tax cuts that are due to expire at the end of year, newly re-elected US President Barack Obama said on Saturday.
In his first weekly address since beating Republican challenger Mitt Romney in Tuesday’s presidential election, Obama said that while he was ‘open to compromise and new ideas’, he wouldn’t accept a deficit reduction plan that put the burden on the middle class, students and older people.
‘If we’re serious about reducing the deficit, we have to combine spending cuts with revenue – and that means asking the wealthiest Americans to pay a little more in taxes,’ he said.
He added: ‘I refuse to accept any approach that isn’t balanced. I will not ask students or seniors or middle-class families to pay down the entire deficit while people making over $250,000 aren’t asked to pay a dime more in taxes.
The tax cuts for those earning $250,000m a year are scheduled to expire on January 1 unless the US Congress approves their extension. Along with a package of automatic spending cuts also set to take effect at the start of January unless a new deficit reduction plan is agreed, they are part of a ‘fiscal cliff’ that analysts have warned will send the US into recession.
Obama said he had invited leaders of both the Democrat and Republican parties to discussions later this week on a broader deficit reduction package, but said Congress should extend the middle-class tax cuts ‘right now’.
‘It’s a step that would give millions of families and 97% of small businesses the peace of mind that will lead to new jobs and faster growth. There’s no reason to wait.’
On Friday, the Republican speaker of the House of Representatives, John Boehner, repeated his call for the president to ‘lead’ the efforts to avert the fiscal cliff.
But he asked for a year extension for all tax cuts, citing analysis that said raising the top rates of tax would ‘destroy’ almost 700,000 jobs.
He added: ‘I'm proposing that we avert the fiscal cliff together in a manner that ensures that 2013 is finally the year that our government comes to grips with the major problems that are facing us. This will bring jobs home, result in a stronger, healthier economy. And a stronger, healthier economy means more Americans working and more revenues – which is what the president is seeking.’
