Obama warns of scrooge X-mas without fiscal deal
US President Barack Obama warned on Friday that Republicans would give Americans a lump of coal for Christmas if they kill his plan to raise $1.6 trillion from higher taxes on the wealthy.world Updated: Dec 02, 2012 00:35 IST
US President Barack Obama warned on Friday that Republicans would give Americans a lump of coal for Christmas if they kill his plan to raise $1.6 trillion from higher taxes on the wealthy.
But the most powerful Republican in Washington, House speaker John Boehner, warned that talks on averting a year-end tax and spending crunch, which could tip the economy back into recession, were going nowhere.
Obama travelled to a toy factory in Pennsylvania to press his case for a plan to stop the US economy tipping off a “ fiscal cliff” when automatic tax hikes and spending cuts come into force on January 1.
Republicans have rejected Obama's first offer to end the stalemate as “ridiculous” and negotiations between the two sides have hit a roadblock with just a month to go, punctuated by the holiday season, until the deadline.
“The sooner Congress gets this done, the sooner our economy will get a boost,” Obama said, pushing his plan to extend tax cuts for the middle class but to raise rates on American families earning $250,000 or more.
“If Congress does nothing, every family in America will see their income taxes automatically go up on January 1,” Obama said. “That's sort of like the lump of coal you get for Christmas. That's a Scrooge Christmas.”
Republicans have complained that Obama's offer -- presented to Boehner by Treasury Secretary Timothy Geithner -- was a rehash of his previous budget request.
“It was not a serious proposal. So right now we're almost nowhere,” Boehner told reporters on Friday, complaining that Obama's offer would not shave off sufficient government spending.
Republicans had said the Obama plan would only cut an extra $400 billion in government spending, but an administration official who described the plan to AFP said the figure would be $600 billion over 10 years.
The savings would be accrued by saving $350 billion on the Medicare health program for the elderly and $250 billion in savings on non-health mandatory programs, the official said.
Republicans say they are ready to raise more revenue from wealthy Americans, but want to do so by closing tax loopholes and limiting deductions rather than raising income tax rates.