Daily Tax Update - November 28, 2012: President Obama: "Framework" For Agreement Sought By Christmas

PRESIDENT OBAMA:  “FRAMEWORK” FOR AGREEMENT SOUGHT BY CHRISTMAS:  Today, in remarks at the White House, President Obama said that he hopes an agreement can be reached on the fiscal cliff by Christmas.  Obama said, "Our ultimate goal is an agreement that gets our long-term deficit under control in a way that is fair and balanced.  That kind of agreement would be good for our businesses; it would be good for our economy; it would be good for our children’s future.  And I believe that both parties can agree on a framework that does that in the coming weeks.  In fact, my hope is to get this done before Christmas."  Obama added, "But the place where we already have, in theory at least, complete agreement right now is on middle-class taxes.  And as I’ve said before, we've got two choices.  If Congress does nothing, every family in America will see their taxes automatically go up at the beginning of next year.  Starting January 1st, every family in America will see their taxes go up.  A typical middle-class family of four would see its income taxes go up by $2,200.  That's $2,200 out of people's pockets.  That means less money for buying groceries, less money for filling prescriptions, less money for buying diapers.  It means a tougher choice between paying the rent and paying tuition.  And middle-class families just can’t afford that right now."  Obama continued, "Even the wealthiest Americans would still get a tax cut on the first $250,000 of their income.  So it's not like folks who make more than $250,000 aren't getting a tax break, too.  They're getting a tax break on the first $250,000 just like everybody else.  Families and small businesses would, therefore, be able to enjoy some peace of mind heading into Christmas and heading into the New Year.  And it would give us more time then next year to work together on a comprehensive plan to bring down our deficits, to streamline our tax system, to do it in a balanced way -- including asking the wealthiest Americans to pay a little more, so that we can still invest in things like education and training, and science and research. . . . So if both parties agree we should not raise taxes on middle-class families, let’s begin our work with where we agree.  The Senate has already passed a bill that keeps income taxes from going up on middle-class families.  Democrats in the House are ready to vote for that same bill today.  And if we can get a few House Republicans to agree as well, I’ll sign this bill as soon as Congress sends it my way."

  • The next round of negotiations to work toward a bipartisan agreement is scheduled to begin tomorrow.  Today, House Speaker John Boehner and other top Republicans rejected a proposal by Rep. Tom Cole (R-OK) that the House agree to President Obama’s request to extend current tax rates for the middle class.  Boehner said, “I told Tom earlier in our conference meeting that I disagreed with him. . . . But raising taxes on the so-called top 2% – half of those people are small business owners that pay their taxes through their personal income tax filing every year.  The goal here is to grow the economy and to cut spending."  Boehner added, "We’re not going to grow the economy if we raise tax rates on the top two rates.  It’ll hurt small businesses.  It’ll hurt our economy.  That’s why it’s not the right approach.  We’re willing to put revenue on the table as long as we’re not raising rates."
  • Erskine Bowles, the co-chairman of President Obama’s 2010 fiscal commission, said today that he thought it is unlikely the President and Congress will reach a deal by the end of this year to avert the so-called fiscal cliff.  Bowles said there is a one-third probability the sides will strike a deal by the end of this year and another one-third chance that all sides will reach a deal early in 2013.  Bowles said, "That still leaves that one-third that we could actually have real chaos and no deal, and I think that would be a disaster. . . . I’m really worried.  I believe the probability is we’re going over the cliff."  Bowles added, "There’s no scientific basis for me to say one-third, it’s just what I feel having spent my life as a negotiator."  Bowles also believes there is "flexibility" in the president’s call to let the tax cuts expire for the wealthiest Americans.

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