| Republicans May Forego Pledge To Save Economy |
| Nov-26-2012 |
| Keywords: republicans, pledge, tax, fiscal cliff |
President Obama and Congressional leaders are back in Washington DC, with all eyes focusing on the negotiations aimed at avoiding the "fiscal cliff."
Seemingly back in campaign mode, President Obama on Monday fired off an open letter to House Republicans, urging them not to ruin Christmas for the middle class.
"Stop holding the middle class and our economy hostage over a disagreement on tax cuts," the letter states.
The president after re-election pledged to immediately sign an extension of the lower Bush-era tax rates, but only for American families bringing in less than $250,000 annually.
The National Retail Federation on Monday took issue with the president's letter to Congress.
"It is encouraging to see the administration's acknowledgment that retailers and their customers will be among the hardest hit if our elected officials fail to address ongoing economic uncertainty," group spokesman Stephen Schatz said. "However ... cherry-picking reforms only serves to reinforce the well-placed fears of American consumers and retailers that the status quo will once again rule the day."
Congressional Republicans are signally their willingness to forego their pledge against higher taxes in order to avert the "fiscal cliff."
The decades-old pledge from the Americans for Tax Reform group was signed by nearly 240 House members and 41 Senators, long seen as a crucial in each members re-election bid.
New York Rep. Peter King and Sen. Lindsey Graham said Sunday they would break the pledge and accept tax changes, higher revenues in order to reduce the deficit, which has exceeded $1 trillion in each of the past four years.
"A pledge you signed 20 years ago, 18 years ago, is for that Congress. ... The world has changed, and the economic situation is different," King said on NBC's "Meet the Press."
The New York congressman said he was opposed to tax increases but that "everything should be on the table" when President Obama, House Speaker John Boehner and Senate Majority Leader Harry Reid try to broker a deal.
"I'm not going to prejudge it, and I'm just saying we should not be taking ironclad positions," King added.
Should Congress and the White House fail to reach an agreement, a $500 billion mix of federal cuts and unrelated tax increases would kick in January 1, 2013.
The across-the-board cuts to the federal budget would equal more than $1 trillion over the next 10 years.
Graham has suggested earlier that he would be open to changes in taxes, but only if Democrats are willing to cut federal spending by scaling back Medicare and Social Security.
"I will violate the pledge, long story short, for the good of the country, only if Democrats will do entitlement reform," he said on ABC's "This Week."
He also said the only pledge that should be made when the country is trillions in debt is to "avoid becoming Greece."
However, Graham said he agrees with Grover Norquist that tax rates should not be increases and instead a result of capping tax deductions.
Indiana Democratic Sen. Dick Durbin recognized that his party needs to "bring entitlement reform into the conversation."
He included Medicare and Medicaid but argued Social Security should be kept off the table because it is a separately funded operation that doesn't add to the deficit.
Arizona Republican Sen. John McCain said Sunday that he wants an approach similar to Graham's -- closing so-called tax "loopholes" to raise revenue but no increases to the marginal tax rates.
Meanwhile the White House on Monday issued a report claiming that if Congress doesn't strike a deal, consumer confidence and retail sales could be hurt.
In a report Monday that coincides with Congress' return after the Thanksgiving holiday, a White House report says that if lawmakers don't halt the automatic increase in taxes for households earning less than $250,000 in the coming days, consumers might even curtail their shopping during the current holiday season.
On its behalf, The White House is asking Treasury Secretary Timothy Geithner to be its lead negotiator in deficit-reduction talks with Congress.
The Treasury Secretary whose been shying away from the spotlight as of late has about a month to strike a deal before the cuts got into effect on Jan 1, 2013.
The report on Monday by President Barack Obama's National Economic Council and his Council of Economic Advisers says a sudden increase in taxes for middle-income taxpayers would reduce consumer spending in 2013 by nearly $200 billion, and would significantly slow what's already been a sluggish economic recovery. |
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Posted by Lou Dobbs Staff at 9:00 PM Email to a friend |
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