President Obama met yesterday with reporters during his first press conference at the White House since his re-election and responded to a wide variety of questions that ranged from the looming “fiscal cliff” over the fiscal budget to the select committee probing the Benghazi attack.
During the press conference, President Obama talked repeatedly to reporters about the need to protect the middle class from paying higher taxes.
“What I’m concerned about is not finding ourselves in a situation where the wealthy aren’t paying more or aren’t paying as much they should; middle-class families, one way or another, are making up the difference.” Obama said.
Later in the conference, President Obama spoke about the importance of not holding the middle class hostage while the rest of the budget debate rages on.
“We should not hold the middle class hostage while we debate tax cuts for the wealthy. We should at least do what we agree on, and that’s to keep middle-class taxes lower.”
Equity markets in the U.S. have reacted negatively over the past 2 weeks and are down to 4 month lows from their peak in 2012, mostly recently over concerns about the looming “fiscal cliff” which amounts to $607 billion in automatic spending cuts and tax increases that are scheduled to take effect at the beginning of 2013 unless Congress decides to act.
Over the next 10 years, 1.2 trillion dollars would be cut from the federal budget.
Rather than have the Bush tax cuts expire for middle class and 98% of Americans, President Obama is attempting to secure $1.6 trillion in increased tax revenues to help reduce the federal deficit by allowing tax rates to rise for wealthiest Americans.
President Obama is proposing to have Bush tax cuts expire for Americans whose income on individuals exceeds $200,000 and with married couples reaches above $250,000, moving the top tax rate back to 39.6 percent from 35 percent.
The President will rely on bipartisan support in Washington D.C. to accomplish nearly all of his fiscal plans.
Many Republicans have spoken candidly in recent days about refusing to go along with new tax revenue unless it is accompanied by entitlement cuts.
“New revenue must be tied to genuine entitlement changes,” Senate Minority Leader Mitch McConnell (R., Ky.) said on Tuesday.
In 2011 the U.S. received a credit downgrade following the “debt ceiling debacle” on Capitol Hill that witnessed both Democrats and Republicans digging in their heels and reaching a last minute deal to raise the U.S. debt ceiling.
Although President Obama was stuck having to make rather uncomfortable alliances with a conservative Republican majority in Congress last year that wanted him out of the White House, he later faced some criticism for not reaching out more to Republicans in Congress to negotiate an earlier compromise deal before the credit downgrade.
During yesterday’s press conference, the question was raised about whether President Obama has any concrete plans to approach his relationships with Congress during the second term.
President Obama answered, “Look, I think there’s no doubt that I can always do better. And so I will, you know, examine ways that I can make sure to communicate my desire to work with everybody, so long as it’s advancing the cause of strengthening our middle class and improving our economy.”
Obama continued, “You know, I’ve got a lot of good relationships with folks both in the House and the Senate. I have a lot of relationships on both sides of the aisle.”
“It hasn’t always manifested itself in the kind of agreements that I’d like to see between Democrats and Republicans, and so I think all of us have responsibilities to see if there are things that we can improve on. And I don’t exempt myself from needing to, you know, do some self-reflection and see if I can improve our working relationship.” he said.
President Obama will start budget talks with congressional leaders on Friday.