November 16, 2012 9:54:44 AM
WASHINGTON -- President Barack Obama challenged congressional Republicans Wednesday to let taxes rise on the wealthiest Americans on both economic and political grounds, noting he campaigned successfully for re-election on the point and contending it would instantly ease the threat of the "fiscal cliff" plunging the nation back into recession.
"A modest tax increase on the wealthy is not going to break their backs," Obama said of the nation's top income earners. "They'll still be wealthy," he said at his first news conference since winning a second term.
At the same time, the president stressed he was amenable to compromise on other approaches from Republicans who say they will refuse to raise tax rates. "I believe this is solvable," he said during the news conference.
At a news conference of his own a short while later, House Speaker John Boehner, R-Ohio, agreed that a bipartisan "spirit of cooperation" has been evident since the election that augurs well for talks expected to begin Friday at the White House.
However, he said of the president's proposal, "We are not going to hurt our economy and make job creation more difficult which is exactly what that plan would do."
Obama seemed eager to avoid issuing any ultimatums. Asked if it would be a deal-breaker for Republicans to refuse to allow the top tax rate to revert to 39.6 percent from the current 35 percent, he sidestepped. "I just want to emphasize I am open to new ideas if the Republican counterparts or some Democrats have a great idea for us to raise revenue, maintain progressivity, make sure the middle class isn't getting hit, reduces our deficit."
Wall Street wasn't encouraged that agreement was becoming more likely. The Dow Jones industrial average dropped 185 points for the day.
The president's remarks were his first extended public discussion of the issue that is dominating the postelection session of Congress, and they followed statements earlier in the week from Boehner and Mitch McConnell of Kentucky, the Senate GOP leader.
Both men have said they, too, want a compromise and have said they are willing to support additional tax revenues as part of a deal that includes tax reform and measures to recast the government's largest benefit programs. But they appear to rule out any legislation that raises tax rates.
McConnell issued a statement calling on Obama to "propose a specific plan that includes meaningful entitlement reforms to strengthen and protect these programs for future generations." He referred to Medicare, Medicaid and Social Security.
The president has moved aggressively this week to lay down markers for any negotiations, first meeting with labor leaders and representatives of liberal groups at the White House, then welcoming a delegation of corporate chief executives for a private session moments after wrapping up his news conference.
Aides said the president is prepared to go to the public in the coming days to enlist support for his position. He said Wednesday, "The American people understood what they were getting" when they voted for him after a campaign that focused heavily on taxes.
Obama is expected to welcome the top leaders of both political parties to the White House on Friday for their first postelection face-to-face discussion of the fiscal cliff, the combination of tax increases and across-the-board spending cuts that will take effect as 2012 gives way to the new year unless Congress intervenes.
Economists in both parties have cautioned that, given the sluggish state of the economy, a return to recession is likely unless lawmakers and the president reach a compromise on legislation.
At his news conference, Obama laid out bleak prospects if he and lawmakers can't reach agreement.
"Everybody's taxes will automatically go up, including the 98 percent of Americans who make less than $250,000 a year, and the 97 percent of small businesses who earn less than $250,000 a year. ... Our economy can't afford that right now," he said.