Daily Tax Update - November 9, 2012: President Calls for Action on "Fiscal Cliff"

PRESIDENT CALLS FOR ACTION ON "FISCAL CLIFF":  Today, in remarks delivered from the White House, President Obama called for action on the year-end fiscal issues.  The President said, "Our work is made that much more urgent because at the end of this year, we face a series of deadlines that require us to make major decisions about how to pay our deficit down -- decisions that will have a huge impact on the economy and the middle class, both now and in the future.  Last year, I worked with Democrats and Republicans to cut a trillion dollars’ worth of spending that we just couldn’t afford."  The President continued, "But as I’ve said before, we can’t just cut our way to prosperity.  If we’re serious about reducing the deficit, we have to combine spending cuts with revenue -- and that means asking the wealthiest Americans to pay a little more in taxes.  That’s how we did it in the 1990s, when Bill Clinton was President.  That’s how we can reduce the deficit while still making the investments we need to build a strong middle class and a strong economy. . . . Now, already, I’ve put forward a detailed plan that allows us to make these investments while reducing our deficit by $4 trillion over the next decade.  I want to be clear -- I’m not wedded to every detail of my plan.  I’m open to compromise.  I’m open to new ideas.  I’m committed to solving our fiscal challenges.  But I refuse to accept any approach that isn’t balanced.  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."  Obama added, "So our job now is to get a majority in Congress to reflect the will of the American people.  And I believe we can get that majority.  I was encouraged to hear Speaker Boehner agree that tax revenue has to be part of this equation -- so I look forward to hearing his ideas when I see him next week.  And let me make one final point that every American needs to hear.  Right now, if Congress fails to come to an agreement on an overall deficit reduction package by the end of the year, everybody’s taxes will automatically go up on January 1st -- everybody’s -- including the 98% of Americans who make less than $250,000 a year.  And that makes no sense.  It would be bad for the economy and would hit families that are already struggling to make ends meet.  Now, fortunately, we shouldn’t need long negotiations or drama to solve that part of the problem.  While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody -- not Republicans, not Democrats -- want taxes to go up for folks making under $250,000 a year.  So let’s not wait.  Even as we’re negotiating a broader deficit reduction package, let’s extend the middle-class tax cuts right now.  Let's do that right now.  That one step -- that one step -- would give millions of families -- 98% of Americans and 97% of small businesses -- the certainty that they need going into the new year.  It would immediately take a huge chunk of the economic uncertainty off the table, and that will lead to new jobs and faster growth.  Business will know that consumers, they're not going to see a big tax increase.  They'll know that most small businesses won't see a tax increase.  And so a lot of the uncertainty that you're reading about, that will be removed.  In fact, the Senate has already passed a bill doing exactly this, so all we need is action from the House.  And I’ve got the pen ready to sign the bill right away.  I'm ready to do it." 

  • Today, Senate Finance Chairman Max Baucus said, "I welcomed the President’s call today for action on the fiscal cliff and the need for Congress to work together to address one of our nation’s greatest economic challenges.  The election is over, and it’s time to move forward.  The American people want Congress working together to break the gridlock of the past two years.  We all know what needs to happen.  Congress must quickly come together around a balanced plan that provides some certainty to American families and businesses, supports jobs, expands opportunity and puts America’s economy back on track.  It’s time to roll up our sleeves and get this job done."
  • House Speaker John Boehner stated that Republicans want to avert the fiscal cliff without raising any taxes and "in a manner that ensures that 2013 is finally the year that our government comes to grips with the major problems that are facing us."  Next year, he argued, "should be the year we begin to solve our debt through tax reform and entitlement reform."  In response to a question, Boehner said, "It’s clear that there are a lot of special-interest loopholes in the tax code, both corporate and personal.  It’s also clear that there are all kinds of deductions, some of which make sense; others don’t.  And by lowering rates and cleaning up the tax code, we know that we’re going to get more economic growth.  It’ll bring jobs back to America.  It’ll bring more revenue.  We also know that if we clean up the code and make it simpler, the tax code will be more efficient.  The current code only collects about 85% of what’s due the government.  And it’s clear that if you have a simpler, cleaner, fairer tax code, that efficiency — the effectiveness and efficiency of the tax code increases exponentially."  Boehner declined to specify which elements he might want in the "down payment" he says he is willing to make by year-end.  Boehner said, "I don’t want to limit the options that would be available to me or limit the options that might be available to the White House.  There are a lot of ways to get there, and I don’t really want to preclude anyone who might have a good idea about how we move forward.  But it’s clear — it’s clear that we’ve got to fix our broken tax system, and we’ve got to deal with our spending problem."

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