Politics
WASHINGTON, DC - NOVEMBER 28:  U.S. President Barack Obama delivers remarks about extending tax cuts for middle class people during an event in the Eisenhower Executive Office Building November 28, 2012 in Washington, DC. With the end-of-the-year "fiscal cliff" looming over lawmakers in Washington, Obama will meet with 14 chief executives at the White House later in the day.  (Photo by Chip Somodevilla/Getty Images) WASHINGTON, DC - NOVEMBER 28: U.S. President Barack Obama delivers remarks about extending tax cuts for middle class people during an event in the Eisenhower Executive Office Building November 28, 2012 in Washington, DC. With the end-of-the-year "fiscal cliff" looming over lawmakers in Washington, Obama will meet with 14 chief executives at the White House later in the day. (Photo by Chip Somodevilla/Getty Images)  

Obama, aides dismiss compromise with GOP on tax hikes, fiscal cliff

Photo of Neil Munro
Neil Munro
White House Correspondent

Since the November election, Democrats have promised to preserve Obama’s huge election machine for use in future disputes, including the budget negotiations. But that machinery can also be used in the 2014 election, when Obama and his allies will try to regain the House majority.

To win that 2014 campaign, Obama and his deputies are also portraying the Republicans as willing to aid the rich by raising taxes on middle-class Americans.

In contrast, “we’re trying to lock in tax cuts,” Carney said Nov. 28.

Boehner pushed back Nov. 29.

“I’m disappointed by what has happened over the last couple of weeks… I’m seriously trying to resolve it, and I would hope the president would get serious as well,” he told reporters on Capitol Hill.

“I’m going to do everything I can to avoid putting the American economy, the American people through the disaster of going over the fiscal cliff,” he said.

That disaster, say political and economic forecasters, could include renewed doubts over the federal government’s ability to pay its huge $11.5 trillion debt.

Lenders’ worries could spike historically low interest rates, and so enormously increase the federal government’s interest payments, which are now roughly $220 billion in 2012. It could also burst several economic “bubbles”, including the bond-market bubble, the $1 trillion student-loan bubble, and the Federal Housing Administration’s housing bubble.

Boehner wants Obama to compromise on taxes and agree to reform high-spending entitlement programs and the tax system by the end of 2013.

“It’s the spending that’s out of control,” Boehner said. He’s got leverage, including the White House’s need to raise its debt limit, which is set by Congress.

In early 2013, Obama will have pushed the nation’s debt up against government’s debt limit, and he’ll need Boehner’s agreement to raise that limit.

“There’s going to be some price tag associated with it… any increase in the debt limit has to be accompanied by spending limitations that meet of exceed it,” Boehner said.

The Huffington Post reported Thursday that Obama has made it “abundantly clear” to Boehner that he wants the debt limit raised as a part of the deal to avert the fiscal cliff.

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