After a Sunday meeting between President Obama and Speaker of the House John Boehner, R-Ohio, their staff members reportedly continued negotiations Monday on how to avoid the fiscal cliff.
However, few details have emerged about Obama’s closed-door meeting with Boehner, and the two sides are apparently still at a stalemate in the negotiations.
Meanwhile, Obama visited Detroit on Monday to discuss the economy, stopping at a Daimler Detroit Diesel Plant to promote the importance of extending tax cuts for middle-class families.
“I believe America only succeeds and thrives when we’ve got a strong and growing middle class,” he told the workers in the audience. “I believe we’re at our best when everybody who works hard has a chance to get ahead; that they can get a job that pays the bills; that they’ve got health care that they can count on; that they can retire with dignity and respect, maybe take a vacation once in a while—nothing fancy, just being able to pack up the kids and go someplace and enjoy time with people that you love; make sure that your kids can go to a good school; make sure they can aspire to whatever they want to be. That idea is what built America.”
Obama announced that Daimler is investing $120 million in the plant, which will support 115 new jobs building transmissions and turbochargers. He pointed out that manufacturing jobs are growing at the fastest rate since the 1990s, and in the past 33 months, private employers have created 5.5 million new jobs in the U.S. But he said such growth was at jeopardy unless the middle-class tax cuts were extended.
“If Congress lets middle-class taxes go up, economists will tell you that means people will spend nearly $200 billion less than they otherwise would spend,” he said. “Consumer spending is going to go down. That means you've got less customers. Businesses get fewer profits. They hire fewer workers. You go in a downward spiral. Wrong idea.”
He said the problem could be solved if Congress simply passes a law to prevent a tax hike on the first $250,000 of everybody's income. “That means 98 percent of Americans—and probably 100 percent of you—97 percent of small businesses wouldn’t see their income taxes go up a single dime. Even the wealthiest Americans would still get a tax cut on the first $250,000 of their income. But when they start making a million, or $10 million, or $20 million, you can afford to pay a little bit more. You’re not too strapped. So Congress can do that right now. Everybody says they agree with it. Let’s get it done.”
Boehner said in the weekly Republican address on Saturday that he had presented President Obama with a Republican plan that would avoid the fiscal cliff.
“This week, I called for action by both parties on a plan to help our economy grow and create jobs, which is critical to solving our debt,” he said. “It’s also critical to averting the so-called fiscal cliff, a combination of automatic spending cuts and tax rate increases that’s just weeks away from taking effect. Some have said that despite the risks, we should let our nation’s economy go off part of the fiscal cliff in January, by allowing the top two rates to rise. They believe that doing that will generate more revenue for the federal government. But here’s the problem with that. Raising those rates on January 1 would, according to the independent firm Ernst & Young, destroy 700,000 American jobs. That’s because many of those hit by this tax increase are small business owners—the very people who are the key to job creation in America. I used to be one of them.”
Boehner noted that he had offered an alternative to President Obama to sending the economy over any part of the fiscal cliff.
“Instead of raising tax rates on the American people and accepting the damage it will do to our economy, let’s start to actually solve the problem,” said Boehner. “Let’s focus on tax reform that closes special interest loopholes and lowers tax rates. Instead of accepting arbitrary cuts that will endanger our national defense, let’s get serious about shoring up the entitlement programs that are the primary drivers of our country’s massive, growing debt. 2013 should be the year to begin to solve our debt through tax reform and entitlement reform. Together, we should avert the fiscal cliff in a manner that ensures that 2013 finally is that year.
“Shoring up entitlements and reforming the Tax Code—closing special interest loopholes and deductions, and moving to a fairer, cleaner, and simpler system—will bring jobs home and result in a stronger, healthier economy,” he added. “A stronger economy means more revenue—which is exactly what the President is seeking. And without a strong economy, we’ll never be able to balance the budget and erase our country’s debt. This framework can lead to common ground. The President and I had a brief conversation this week and I’m hopeful that we can continue those talks and forge an agreement that can pass both chambers of Congress. Because if there was a mandate in this election, it was a mandate to work together to do what’s in the best interest of our country. And right now what’s best is getting our economy moving again and keeping it moving, so we can begin to restore our children’s future.”
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access