Obama cranks up "fiscal cliff" pressure, Boehner says talks stalemated
HATFIELD, Penn. (Reuters) - President Barack Obama turned up the pressure in "fiscal cliff" talks on Friday, hitting the road to drum up support for his drive to raise taxes on the wealthy and warning Americans that Republicans were offering them "a lump of coal" for Christmas.
In a visit to a Pennsylvania toy factory, Obama portrayed congressional Republicans as Scrooges who risked sending the country over the fiscal cliff rather than strike a deal to avert the tax increases and spending cuts that begin in January unless Congress intervenes.
In Washington, House of Representatives Speaker John Boehner declared a stalemate in the talks and said Obama's plan to raise taxes on the rich was the wrong approach.
"There is a stalemate. Let's not kid ourselves," the Ohio Republican said. "Right now we are almost nowhere."
Lawmakers are nervously eyeing the markets as the deadline approaches, with gyrations likely to intensify pressure to bring the drama to a close.
Major stock market indexes fell as Boehner spoke but recovered afterward. It was a repeat of the pattern earlier in the week when the Speaker offered a gloomy assessment.
The latest round of high-stakes gamesmanship focuses on whether to extend the temporary tax cuts that originated under former President George W. Bush beyond their December 31 expiration date for all taxpayers, as Republicans want, or just for those with income under $250,000 (156,103 pounds), as Obama and his fellow Democrats want.
"If Congress does nothing, every family in America will see their taxes automatically go up on January 1," Obama said during his visit to a factory in suburban Philadelphia. "That's sort of like the lump of coal you get for Christmas. That's a Scrooge Christmas."
Obama, who made higher tax rates for the wealthy a centrepiece of his re-election campaign, said Americans should pressure Republicans to quickly agree to extend the middle-class tax cuts that cover 98 percent of the public.
"We already all agree, we say, on making sure middle-class taxes don't go up. So let's get that done. Let's go ahead and take the fear out for the vast majority of American families so they don't have to worry," Obama said at The Rodon Group factory, which makes K'NEX building toy systems as well as Tinkertoys and consumer products.
Obama's trip to Pennsylvania was part of a renewed public relations push on the fiscal cliff that the White House hopes will build support for his stance. The effort has infuriated Republicans, with Boehner calling it a "victory lap" on Thursday as he rejected Obama's proposals to avoid the cliff.
"It tells you he's not interested in negotiating. He's more interested in travelling around the country trying to campaign," Representative Jim Gerlach, a Pennsylvania Republican, said on CNBC on Friday.
The effort continues next week, as Treasury Secretary Timothy Geithner, Obama's lead negotiator in the talks, makes the rounds of television talk shows on Sunday. Obama will meet a bipartisan group of governors at the White House on Tuesday, and the president will address the Business Roundtable on Wednesday.
Boehner is scheduled for an appearance on Fox News Sunday.
Obama and Boehner both said they still believe the two sides can work together to find a solution before the end-of-year deadline.
But Boehner has been scrambling to keep his House Republicans in line, with some signalling more flexibility on ways to find a combination of new revenue and spending cuts that could yield an agreement.
Most House Republicans refuse to back higher rates, preferring to raise revenue through tax reform. But some have suggested they would support a deal with higher rates for the rich if it includes significant cuts in the government-sponsored Medicare and Medicaid healthcare entitlement programs.
Senate Republican Leader Mitch McConnell of Kentucky told the Wall Street Journal in an interview that Republicans would agree to more revenue - although not higher tax rates - if Democrats agreed to such changes as raising the eligibility age for Medicare and slowing cost-of-living increases in the Social Security retirement program.
House Democratic Leader Nancy Pelosi of California, who has opposed such changes, brushed off the comments. "Nothing new in that statement from Mitch McConnell," she said.
Moderate Republican Representative Steven LaTourette of Ohio, who is retiring at year's end, said he would back some high-end tax rate increases if the deal reforms Medicare.
He said he would support new limits on high-income earners' Medicare benefits, and raising the eligibility age for entitlement programs.
Obama said he was encouraged by the shifting views of some Republicans, and urged House approval of a bill that has already cleared the Democratic-controlled Senate that would lock in the middle-class tax cuts and raise the rates for the rich.
"If we can get a few House Republicans on board, we can pass the bill ... . I'm ready to sign it," Obama said.
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