|“Everybody else has been willing to move off their maximalist position — they need to do the same,” said President Obama about Republicans.|
Obama tells Republicans higher taxes are necessary
GOP retorts spending can be cut further
WASHINGTON — President Obama pressured Republicans yesterday to accept higher taxes as part of any plan to pare down the federal deficit, telling lawmakers that they “need to do their job’’ and strike a deal before the United States risks defaulting on its debt.
Declaring that an agreement is not possible without painful steps on both sides, Obama said his party had accepted the need for substantial spending cuts in programs it had long championed, and that Republicans must agree to end tax breaks for oil and gas companies, hedge funds, and other corporate interests. In a 67-minute news conference, Obama cast the budget battle as a tug of war between the interests of the rich and those of the middle class, the elderly, and children.
Directly challenging Republican leaders, Obama said that “everybody else has been willing to move off their maximalist position — they need to do the same.’’
At the same time, Obama, under assault from Republicans on the campaign trail for an unemployment rate that remains above 9 percent, asked voters to understand that the economic recovery would take time but said that Washington, even in its current financial straits, could still do more to help. He expressed support for extending a reduction in payroll taxes for an extra year, providing loans for road and bridge-building and approving trade pacts that could help spur exports.
House Speaker John A. Boehner rejected Obama’s call for new tax revenues, saying the “president’s remarks ignore legislative and economic reality.’’
In a toughly worded statement, Boehner said the House would vote to raise the debt limit, as the White House has demanded, only if it agreed to a deal that contained deep spending cuts and no tax increases.
“The American people know tax hikes destroy jobs,’’ Boehner said. “They also know Washington has been on a spending binge for many years, and they will only tolerate a debt-limit increase if we stop it.’’
But the president’s combative remarks on the budget commanded most of the attention, signaling that he had fully entered the fray. On Monday, he took over stalled talks led by Vice President Joe Biden. So far, the president’s involvement seems mainly to have dramatized the gulf between the White House and the Republicans on fiscal priorities.
By all accounts, the round of negotiations steered by Biden made significant progress in identifying spending cuts, such as the Pentagon budget, and revenue-generating items, such as increased pension contributions by federal workers. But with an Aug. 2 deadline looming for the expiration of the government’s borrowing authority, the partisan maneuvering on both sides has increased.
Senate Republicans have talked about a short-term increase in the debt ceiling, betting that the White House will accept spending cuts, with no tax increases, rather than face two votes on the issue before the 2012 election. Obama is taking aim at tax policies that benefit the rich as a way to pressure Republicans. Asserting that chief executives and hedge fund managers are paying the lowest tax rates since the 1950s, the president, casting the issue in populist terms, said they could afford to pay more.
“You’ll still be able to ride on your corporate jet,’’ Obama said. “You’ll just have to pay a little more.’’
Under Democratic proposals, owners of corporate jets would have to write off the aircrafts’ cost in fewer years, which would generate an estimated $3 billion for the Treasury over a decade. Hedge funds and private equity investors would pay higher capital gains tax on their earnings. Phasing out tax deductions and credits for oil and gas companies could raise nearly $40 billion, economists said.
But refusing to increase revenues, he asserted, would necessitate cuts in programs that award college scholarships, finance medical research, and improve food safety.
“I’ve said to some of the Republican leaders: you go talk to your constituents, the Republican constituents, and ask them, are they willing to compromise their kids’ safety so that some corporate-jet owner continues to get a tax break?’’ Obama said. “I’m pretty sure what the answer would be.’’