President Obama gave a seven-minute speech in the East Room of the White House Nov. 9, establishing his position on addressing what has become known as the "fiscal cliff" and readying the country for likely more bipartisan sparring.
Obama reiterated his position that wealthier Americans should pay "a little more" in taxes to help reduce the deficit and made a call for middle-class tax cuts to be implemented "right now," while lawmakers negotiate the broader deficit-reduction package.
The looming fiscal cliff is the result of a number of factors. On Jan. 1, 2013, Bush-era tax cuts for Americans making more than $250,000 are set to expire; $1.2 trillion worth of budget cuts on everything from domestic programs to defense will go into effect; a payroll tax cut will also expire and payment tax cuts to Medicare physicians will go into effect.
"At a time when our economy is still recovering from the great recession, our top priority has to be jobs and growth," said the president.
He said that he has invited leaders from both parties to the White House next week, and that he plans to also bring in business, labor and civic leaders from across the country to get their input. Adding that he has created a detailed plan, Obama continued:
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'm not going to ask students and seniors and middle-class families to pay down the entire deficit, while people like me, making more than $250,000, aren't asked to pay a dime more in taxes.
Obama's position on tax increases for those making more than a $250,000 puts him in opposition with House Speaker John Boehner (R-Ohio), who is against raising taxes on the wealthiest Americans.
"The problem with raising tax rates on the wealthiest Americans is that more than half of them are small-business owners. .... Raising tax rates will slow down our ability to create the jobs that everyone says they want,” Boehner said in response to a question, according to the The Washington Post, following a press conference ahead of Obama's.
The members of our majority understand how important it is to avert the fiscal cliff. That's why ... the House took action this summer to extend all of the current tax rates for one year, so that we have time to overhaul our tax code, and it's why I outlined a responsible path forward where we can replace the spending cuts and extend the current rates, paving the way for entitlement reform as well as tax reform, with lower rates.
Boehner added the challenge to reach an agreement that both Democrats and Republicans can agree on is "an opportunity for the president to lead."
President Obama, in calling for the immediate implementation of middle-class tax cuts said that one step "would give millions of families—98 percent of Americans and 97 percent 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."
AT&T held an analyst event Nov. 7 at which CEO Randall Stephenson said that the company has invested more capital in the U.S. economy than any other public company and is no doubt suffering from such uncertainty.
Stephenson, addressing "the January situation," said AT&T is hopeful that representatives in government will realize that the situation is causing people to be cautious and pause their spending. "We need some kind of resolution to the financial cliff," said Stephenson.
He added, "I believe that if there's some indication of how we get from here to there, it'll help."