By Nick Mann | 20 December 2012
US President Barack Obama still believes a deal can be done before Christmas to avoid the ‘fiscal cliff’, the automatic spending cuts and tax increases that could send the country into recession.
Speaking yesterday, Obama said he remained ‘optimistic’ and was ‘open to conversations’ with the Republican opposition and ‘eager to get something done’.
He added: ‘I'm going to reach out to all the leaders involved over the next couple of days and find out what is it that's holding this thing up.
‘If the argument from Republicans iswe haven't done enough spending cuts; that argument is not going to fly because we've got close to a trillion dollars of spending cuts. And when you add interest, then it's more than a trillion dollars in spending cuts.’
He criticised plans put forward this week by the Republican speaker for the House of Representatives, John Boehner, for a ‘Plan B’, with tax increases only for those earning over $1m a year.
Obama said: ‘If the argument is that they can't... increase tax rates on folks making $700,000 or $800,000 a year, that's not a persuasive argument to me and it's certainly not a persuasive argument to the American people.’
According to the White House, the Republican’s Plan B proposals would equate to a tax break of $50,000 for millionaires.
‘There’s a difference in terms of them wanting to preserve tax breaks for folks between $250,000 and a million that we just can’t afford,’ Obama said.
‘Keep in mind I’m in that income category; I’d love to not pay as much in taxes. But I also think it’s the right thing to do for us to make sure that people who have less – people who are working, people who are striving, people who are hoping for their kids – that they have opportunity. That’s what we campaigned about. That’s what we talked about.’
On Tuesday, Boehner explained that he was hopeful an agreement could be reached on a ‘balanced approach’, but that the White House was offering to reduce net spending only by $850bn in return for $1.3bn in revenue increases. ‘That’s not balanced in my opinion,’ he said.
He said ‘Plan B’ was needed to ‘protect as many American taxpayers as we can’. He added: ‘I continue to have hope that we can reach a broader agreement with the White House that would reduce spending as well as have revenues on the table. I think it’d be better for our country. But at this point, having a backup plan that makes sure that as few American taxpayers are affected by this increase as possible – moving down that path is the right course of action for us.’
