WASHINGTON (AP) — President Barack Obama and House Speaker John Boehner are signaling they’re open to some compromise on a taxes and spending to prevent more financial pain in the new year, but the two sides are digging in on raising taxes for wealthier Americans. Obama said Friday that his re-election gave him a mandate to pursue that position because “the majority of Americans agree with my approach.” Boehner is still insisting that raising tax rates as Obama wants “will destroy jobs in America.”
The political maneuvering about the so-called fiscal cliff sets up a confrontation to see whether the White House or the House blinks first. The outcome will affect tens of millions of Americans, given that the tax hikes and budgets cuts set to kick in Jan. 1 could spike unemployment and bring on a new recession.
The presidential contest is now over, but another campaign has just begun.
The White House made its pitch directly to the public, shipping around a video by email and telling Americans that “this debate can either stay trapped in Washington or you can make sure your friends and neighbors participate.”
Obama invited the top four leaders of Congress to the White House next week for talks, right before he departs on a trip to Asia.
All sides are seeking to leave themselves room to maneuver. Despite the talk of possible compromise, both sides are taking a hard line.
Obama never expressly said that tax rates on top earners must return to the higher levels of the Bill Clinton era, leading to speculation that he was willing to soften the core position of his re-election campaign to get a grand debt deal with Republicans.
“I’m not wedded to every detail of my plan. I’m open to compromise,” he said.
But his spokesman, Jay Carney, seemed to slam that door. He said Obama would veto any extension Congress might approve of tax cuts on household incomes above $250,000.
Obama’s remarks were choreographed so that a diverse-looking group of Americans stood behind him and dozens more were invited to pack the East Room. In the weeks ahead, he plans to pull in the public as a way to pressure Congress.
“I am not going to ask students and seniors and middle-class families to pay down the entire deficit while people like me, making over $250,000, aren’t asked to pay a dime more in taxes. I’m not going to do that,” said Obama.
He said voters plainly agreed with his approach that both tax increases and spending cuts are needed to trim the national debt.
“Our job now is to get a majority in Congress to reflect the will of the American people,” Obama said.
About 60 percent of voters said in exit polls Tuesday that taxes should increase, either for everyone or those making over $250,000. Left unsaid by Obama was that even more voters opposed raising taxes to help cut the deficit.
The scheduled year-end changes include a series of expiring tax cuts that were approved in the George W. Bush administration. The other half of the problem is a set of punitive across-the-board spending cuts, looming only because partisan panel of lawmakers failed to reach a debt deal.
Put together, they could mean the loss of roughly 3 million jobs.
Since the election, Boehner and Obama have both responded to the reality that they need each other — though their rhetoric is a bit testy.
“This is his opportunity to lead,” Boehner said of Obama, not long before the president said: “All we need is action from the House.”
Obama said the uncertainty now spooking investors and employers will be shrunk if Congress extends — quickly — the tax cuts for all those except the most-well off. The Senate has passed such a bill. The House showed no interest on Friday in Obama’s idea.
Compromise has become mandatory if the two leaders are to avoid economic harm and the anger of a public sick of government dysfunction.
Obama says he is willing to talk about changes to Medicare and Medicaid, earning him the ire of the left. Boehner says he will accept raising tax revenue and not just slashing spending, although he insists it must be done by reworking the tax code, not raising rates. The framework, at least, is there for a broad deal on taxes.
Associated Press writers Andrew Taylor, Donna Cassata, Julie Pace, Matthew Daly, Jim Kuhnhenn and Ken Thomas contributed to this report.
Follow Ben Feller on Twitter at www.twitter.com/BenFellerDC
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