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Obama Calls for 'Compromise' on Tax Cuts, But Doesn't Offer Deal

1 year ago
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President Barack Obama said Saturday there's "room for compromise" on Bush-era tax relief, yet at the same time he insisted the nation cannot afford to extend the cuts to Americans making more than $250,000.

It was not clear where the president thought a compromise should fall. "None of us want to wake up on Jan. 1 with a higher tax bill," he said in his weekly address. "That's why I believe we should permanently extend the Bush tax cuts for all families making less than $250,000 a year. That's 98 percent of the American people."

In remarks recorded before he left for his 10-day Asian trip, the president also seemed to reach out to the Republican majority which will take power in the U.S. House in January. The GOP wants the tax relief enacted under President Bush in 2001 and 2003 continued for all Americans -- and Obama's former budget director Peter Orszag is among Democrats who agree.

Without any action -- as dictated under the original legislation -- the tax cuts will expire for everyone on Jan. 1. Congress will. address taxes in its lame duck session, beginning later this month, with Democrats still control of both the House and Senate.

"Something's got to be done," Obama said. "And I believe there's room for compromise." He didn't say what that compromise might be, but it could include a higher income threshold for keeping the tax cuts, or something short of a permanent extension for higher income taxpayers -- say a year or two as Orszag has proposed.

But Obama seemed resolute on that point. The administration argues that keeping the tax cuts for those it regards as wealthy would eventually add $700 billion to the nation's deficit. "At a time when we are going to ask folks across the board to make such difficult sacrifices, I don't see how we can afford to borrow and send an additional $700 billion from other countries to make all the Bush tax cuts permanent, even for the wealthiest 2 percent of Americans," he said. "We'd be digging ourselves into an even deeper fiscal hole and passing the burden to our children."

In another breath, he said, "I recognize that both parties are going to have to work together and compromise to get something done here." Perhaps, the president is laying down markers for the beginning of negotiations. Obama plans to meet with congressional leaders, including Speaker-in-waiting, Rep. John Boehner (R-Ohio), at the White House on Nov. 18.

For the Republicans Saturday, Sen.-elect Marco Rubio of Florida, demanded an end to "wasteful spending," and a "government reaching ever further into our lives." During his successful campaign, Rubio said he would oppose any deal in Washington that does not keep the tax reductions for everyone.

Watch the president's address here.



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116 Comments

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flora489

I wish these comments could get to Obama and he would see that what we want are tax cuts only for the middle class---which soon will join the ranks of the unemployed working class. I cannot understand why he is such a wimp and is afraid of the Republicans. He should be more afraid of we, the people. We want a President who will do what we want, stand up on his hind legs and tell the Republicans "NO", and the devil take the hindmost. They have vowed that their first (and only) priority is to make him a on term president. If that is so, he has nothing to lose by opposing them. I canot understand when is he going to learn there is no compromising with them. By do so, he is betraying us. Before it is too late, we should bombard him with our thinks and wants.

November 30 2010 at 5:06 PM Report abuse rate up rate down Reply
1 reply to flora489's comment
Willie B.

You have no idea what you are talking about. I own a small business. As a S-corp my company's income is passed on to me as personal income. I make $80,000.00 per year but my company brings in over $250,000.00 so anything over $250,000 I would have to claim as personal income in addition to the $80,000.00 that my family actually live off of even though I don't take one penny of it home to spend. I guess that makes me rich. The income we make goes to buy inventory which is taxed and equipment which is taxed. We also put some aside to cover payroll expenses in case some of our customers don't pay on time. I have already let two of my employees know that if the tax cuts aren't extended, I will not be able to keep them employeed. What a great Christmas their families will have. The Democrats have no idea how the real world works. As long as they get their free handouts, life is good. I guess someone who has worked hard to get a good education, takes the risks to start and build a business has to work to pay for their lazy rear ends.

December 02 2010 at 3:00 PM Report abuse rate up rate down Reply
kitty cat

we all act like the top 2 percent got there from just being average --no ,we make it there with hard work and giving up things like vacations , family outings,sleep etc its not like you are giving the rich the lottery ---its cutting them some slack --cuss we pay the highest taxes ---47 percent of you dont pay crap!!!!!!!!! and i pair more than my fair share --by fair --so us a lil break is not that crazy--- this spread the wealth talk is nuts ------we have millions on wealfare , 1m gang members or so --disability ,unemployment on and on -----if you live here you should pay something --VAT TAX would be awesome then we all contribute ---and cut spending -its not that hard to figure out ---if you spend 40m of your own money for a less than 200k a year job ----something is aweful fishy --like getting it all back 10 fold stop blaming the rich --what have they done so bad ---except pay for most of the spending

November 28 2010 at 1:11 AM Report abuse +1 rate up rate down Reply
1 reply to kitty cat's comment
flora489

I gree with most of what you say, but do you really understand what a VAT tax is? It starts with the material the manufacturer uses, then when the product is worth, the product is worth more than raw material, then shipping, then the local store keeper, then, then, then, then. I have left out a bunch of "then" in the beginning because the farmer gets a then etc. the brits had it, I don't know if it still in effect there, but it ain't workin' and we don't need to pay more tax than it item is worth. So one is paying taxz upon tax upon tax. There has to be a better way, but no one (including me) knows what it is.

November 30 2010 at 5:15 PM Report abuse rate up rate down Reply
Les

this admin. has spent more than both wars combined and then some. Have you spent a trillion today? Day is young yet.

November 07 2010 at 10:44 AM Report abuse +1 rate up rate down Reply
Richard

No deals; make the Republicans put legislation on the table first !

November 07 2010 at 9:06 AM Report abuse -8 rate up rate down Reply
sfamilyent

Forget the income levels already! Extend the tax cuts on ordinary income and allow the long term capital gains cuts to expire. Also, treat "carried interest" the same as ordinary income... Stop focusing on income levels, and start working on fixing the worst of the tax codes that allow the wealthy to pay lower tax rates than people who work for a living. Start treating income, regardless of the source, the same.

November 07 2010 at 8:28 AM Report abuse rate up rate down Reply
enpassant44

If you want to not only reduce the deficit, but actually start paying down the debt, add a few higher tax brackets for the ultra-rich. That was the case before Reagan was in office, and, until then, this country was quickly paying off the enormous debt we got into from World War II.

November 07 2010 at 12:57 AM Report abuse -4 rate up rate down Reply
1 reply to enpassant44's comment
Willie B.

Why do you want someone else to do the heavy lifting. Do you not think you have contributed anything to the problem. It is always funny to see people adamant about spending someone elses money. As long as I don't have to give up anything from my piggy bank. If there are going to be tax increases then everyone should participate and to each according to their income level. If there are going to be tax cuts then everyone should participate and to each according to their income level.

December 02 2010 at 3:12 PM Report abuse rate up rate down Reply
enpassant44

How about also adding a few more tax brackets at the ultra high end?

November 07 2010 at 12:51 AM Report abuse -3 rate up rate down Reply
1 reply to enpassant44's comment
changehasarrived

Why do you always want to punish the wealthy? Everyone should simply pay a flat percentage of their earnings, and stop trying to make the wealthy pay for the deadbeats and Dem's endless handout programs on hardworking taxpayer backs.

November 07 2010 at 5:24 PM Report abuse +6 rate up rate down Reply
FRED

Tax cut should be across the board, the idea of taxing the rich only weakens the rich and takes their money out of the economy putting it into the government's hand. The government is the worst group of idiots to give your money to, they have no idea on how to get the most for "our" money. The private sector is far more efficient with their money, plus it is not fair to steal from those who have worked hard for their money. I never got a job from a poor person.

November 06 2010 at 10:42 PM Report abuse +7 rate up rate down Reply
1 reply to FRED's comment
cruisedoc

Layne, yes, with everything they buy and everyone they hire.

November 07 2010 at 12:20 AM Report abuse +4 rate up rate down Reply
Rob & Kathy

lee4hut5:01 PM Nov 6, 2010 Let me define it for you. If you make more that $200.000 a year you should be considered rich, no matter what your expenditures amount to. ************ Really? Tell us how you arrived at that figure....

November 06 2010 at 10:24 PM Report abuse +9 rate up rate down Reply
cruisedoc

Latest poll (Nov. 1st): 58% favor repeal, 36% oppose repeal. This is the highest % yet who favor repeal on a national basis. Some states favor repeal by 70%. I'm a dem, but this plan is a disaster for so many reasons I could write a book. The GOP wants to repeal & replace, key word = replace. Even dem stratigists now agree it will not lower costs. That was said to sell it. What it was designed for was to give free HC to many. But there really is no free lunch. This will cost a fortune, and it WILL be the middle class who bears the burden. (although much of the cost will be hidden in things like state taxes, medical supplies (they are going to be taxed), HC premiums, and pretty much everything you buy, since businesses will bear a burden that they will pass on to YOU). Dr. G. BTW, there are measures that would actually reduce costs, but they aren't in the bill ...trial lawyers are big contributors to the dem party.

November 06 2010 at 9:41 PM Report abuse +7 rate up rate down Reply

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