LITTLE ROCK — President Barack Obama and House Speaker John Boehner stood their ground with opposing plans to avert the “fiscal cliff” and warned there was no quick path to a solution.
“In Washington, nothing’s easy so there’s going to be some prolonged negotiations,” Obama said Friday from the floor of a toy factory in Hatfield, Pa.
“There’s a stalemate, let’s not kid ourselves,” Boehner said less than 30 minutes later during a news conference at the Capitol in Washington.
“Right now, we’re almost nowhere,” Boehner said.
The deadlock is over tax rates for the top 2 percent of wage earners in the country, extending a battle that has been waged for more than a year between Obama and Republicans in Congress. The issue has gained more urgency as the clock ticks down on more than $600 billion in tax increases and spending cuts scheduled to start taking effect in January.
In a campaign-style appearance at a facility of the Rodon Group, which makes Tinkertoys and K’NEX building sets, Obama said quick action by lawmakers to extend George W. Bush-era tax cuts for middle-income Americans — while letting top rates rise — would give time for tougher negotiations on cutting spending to rein in a budget deficit that has exceeded $1 trillion during each of the four years he’s been in office.
With the approach of Christmas, and the retail sales the season sparks, Obama said acting on rates would give consumers certainty even if the debate on spending isn’t settled. Consumer spending accounts for about 70 percent of the economy.
“Where the clock is really ticking, right now, is on middle-class taxes,” he said.
Boehner refused to give in on raising tax rates on high earners, saying that doing so would deal a “crippling blow” to small business and hurt economic growth.
“We’re willing to put revenues on the table but revenues that come from closing loopholes, getting rid of special interest deductions and not raising rates,” Boehner said.
“We think it is better for the economy clear and simple.”
The dueling appearances followed Treasury Secretary Timothy Geithner’s shuttling among congressional leaders Thursday with a plan to trade $1.6 trillion in tax increases for $400 billion in unspecified entitlement-program cuts.
As part of the administration’s campaign for public support, Geithner also will appear on the five main Sunday news interview shows, on NBC, ABC, CBS, Fox and CNN. Next week, Obama will meet with a group of governors on the fiscal cliff and address the Business Roundtable, Josh Earnest, a White House spokesman, said.
Republicans complained that the offer was little more than a rehash of old budget proposals, setting the stage for more contentious negotiations over the next several weeks.
Republicans also are seeking an overhaul of entitlement programs in exchange for raising tax revenue through other methods, such as limiting deductions.
They want a higher Medicare eligibility age and an alternative yardstick for calculating inflation that would reduce Social Security costof-living adjustments, according to a Republican aide who wasn’t authorized to speak publicly.
The Congressional Budget Office has warned that if Congress doesn’t avert the fiscal cliff, the economy might slip into recession next year and boost the unemployment rate to 9.1 percent in the fourth quarter of 2013, compared with 7.9 percent now.
Democrats rebuffed complaints from Republicans about the plan they were presented with Thursday and criticism that Obama wasn’t giving enough details in his offer.
Geithner presented a “very specific offer” to Republicans, Maryland’s Rep. Steny Hoyer, the second-ranking House Democrat, said.
“I don’t think it’s a take-itor-leave-it offer,” he told reporters. If Republicans “don’t like it, which apparently they do not, they need to counteroffer.”
Obama and his allies argue that the president’s re-election demonstrates public support for his position because he made it clear during the campaign.
House Minority Leader Nancy Pelosi, D-Calif., said Obama “made it very clear he was supporting tax cuts for the middle class” during his re-election campaign.
“The people spoke in the election,” said Jack Hansen, a Democrat and a borough councilman in Lansdale, Pa., near Hatfield, who was at Obama’s event at the factory.
K’NEX Industries Inc. Chief Executive Officer Michael Araten, a Democrat and Obama supporter, said raising taxes on middle-income families will have a bigger impact than raising taxes on top earners.
“If you remove $200 billion of discretionary spending from the American economy, that’s going to hurt businesses a lot more than the incremental 3 percent I might pay on my taxes,” he told reporters after Obama spoke.
Boehner, who also will appear on Fox News Sunday, and Senate Minority Leader Mitch McConnell, R-Ky., accused Obama of extending his political campaign rather than negotiating. Rep. Pat Tiberi, an Ohio Republican, said he’s frustrated with Obama’s approach.
“The president won 50 states and 75 percent of the vote,” he said. “That’s what they’re acting like.”
Still, Tiberi, a member of the tax-writing Ways and Means Committee, said Obama’s strategy may be working.
“We’re getting our socks cleaned by the president in the PR war,” he said.
Geithner’s offer, as described by two Republican aides, is based on Obama’s fiscal 2013 budget and his 2011 proposal to the deficit-cutting supercommittee, which last year didn’t come up with a plan all sides could accept.
It would raise taxes for top earners by $1.6 trillion over the next decade with higher rates on income, capital gains, dividends and estates, along with limits on tax breaks. It would call for about $400 billion in cuts to entitlement programs, which Republicans have deemed insufficient.
The plan would either extend or replace a payroll-tax cut that is set to expire at the end of the year, according to the Republican aides. It would protect millions more people from having to pay the alternative minimum tax and defer by a year the federal spending cuts set to begin in January.
Few in the audience at the president’s rally said they had much tolerance for the back and forth in the nation’s capital.
“Frankly, everyone’s a little worried and tired of hearing about it,” said Robert Ulmer, 58, a mold maker at the factory. “People would feel better about Christmas without this.”
Ulmer, who voted for Obama, said he thought Republicans who said the president should’ve stayed in Washington to negotiate might have a point, given the cost of the trip, “with the security and all.”
Still, Ulmer said he expected a deal to be forged before Christmas — or New Year’s Eve.
“I don’t think either side can afford not to,” Ulmer said. “Obama doesn’t want to be Herbert Hoover, two recessions on his watch. They’ll get it done.”
Information for this article was contributed by Margaret Talev, Roxana Tiron, Kathleen Hunter, Richard Rubin, James Rowley and Roger Runningen of Bloomberg News and by William Douglas and Lesley Clark of McClatchy Newspapers.
Front Section, Pages 1 on 12/01/2012