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MENAFN - Khaleej Times - 11/11/2012

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(MENAFN - Khaleej Times) US President Barack Obama urged Congress on Saturday to immediately extend a tax cut for middle-class Americans, arguing the move will give 98 per cent of families and 97 per cent of small businesses the certainty that will lead to faster economic growth.

"This is something we all agree on," the president said in his weekly radio and Internet address. "Even as we negotiate a broader deficit reduction package, Congress should extend middle-class tax cuts right now.

"It's a step that would give millions of families and 97 per cent of small businesses the peace of mind that will lead to new jobs and faster growth."

On Friday, Obama invited top Republican and Democratic leaders to the White House this week for talks focused on averting the so-called "fiscal cliff."

Such a cliff would represent a catastrophic blend of automatic tax hikes and harsh defence and domestic spending cuts that are due to kick into force on January 1, if no other decision is made and approved by Congress.

The showdown will be a crucial test of whether the newly re-elected Obama can bend gridlocked Washington to his political will, with implications for his capacity to enact an ambitious second term agenda.

Obama campaigned on raising taxes on families earning 250,000 a year or more to pay for deficit reductions and to fund education spending and other plans to boost the economy and improve life for the nation's middle class.

But congressional Republicans have opposed tax increases of any kind.

In his address, the president he was not willing to compromise on this issue.

"This was a central question in the election," he said.

"And on Tuesday, we found out that the majority of Americans agree with my approach - that includes Democrats, Independents, and Republicans. Now we need a majority in Congress to listen."

The White House said that the president would veto any bill that called for an extension of the George W. Bush era tax cuts for the two percent of Americans earning more than 250,000 a year.

In his first event at the White House on Friday since beating Republican Mitt Romney in Tuesday's election, Obama called on Congress to work with him to produce a plan. "I'm not wedded to every detail of my plan. I'm open to compromise. I'm open to new ideas," he said. "I'm committed to solving our fiscal challenges, but I refuse to accept any approach that isn't balanced."

"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," he said.

But Republican House Speaker John Boehner warned in his address the tax increase would destroy more than 700,000 American jobs.

"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," Boehner said.

"Let's focus on tax reform that closes special interest loopholes and lowers tax rates."

The statements showed the two men, who have been divided on the issue for two years, were still far apart, leaving doubts over whether the "fiscal cliff" could be averted. Congress is expected to address it when it reconvenes next week for a post-election lame-duck session.

"Boehner and Obama are using softer tones, but the substance of what they're saying hasn't changed very much, and it doesn't look like there's been any movement from the last time they had a budget discussion," said Stan Collender, a former congressional budget aide.

 






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