Obama on the Fiscal Cliff: It’s Solvable
The divisive issues that could hold the middle class hostage are tax hikes for the wealthy and entitlement cuts. Obama’s approach calls for increased revenue from America’s wealthiest citizens, a strategy that many Republicans adamantly oppose. The Republicans’ path to fiscal responsibility involves deep cuts to entitlement, many of which Democrats oppose.
“I believe we have to take a serious look at how we reform our entitlements,” said Obama, offering some hope that compromises could be made. Obama will reportedly come to the negotiating table asking for a revenue increase of $1.8 trillion, which is expected to be brought down to a more agreeable rate of around $1 trillion. However, the President put his foot down on revenue.
“What I’m not going to is extend bush tax cuts for the wealthiest 2 percent that we can’t afford, and according to economists will have the least positive impact on our economy,” he said.
When asked whether closing loopholes would satisfy him, he responded that while loopholes should be closed, it won’t be enough. “The math tends not to work,” he said, meaning that there will be about $1 trillion missing from the budget without the tax increases on wealthy Americans.
“I believe this is solvable,” said Obama. “I think that fair minded people can come to an agreement that does not cause the economy to go back into recession.”
“My budget frankly does it,” he said, but added “I don’t expect the Republicans to simply adopt my budget, that’s not realistic. So I recognize that we’re going to have to compromise.”
When asked if he could envision any scenario where America does go off the fiscal cliff, the president said that the resulting tax hike for middle-class families “will have a big impact on the holiday shopping season, which in turn will have an impact on business planning and hiring and we can go back into a recession.”