Following the House vote that averted the fiscal cliff Tuesday night by raising taxes on the wealthy, President Obama warned lawmakers that he quickly will seek more tax revenue from high earners and corporations and that he wont bargain in an impending battle over raising the nations borrowing limit.
While Republicans in Congress say the spending cuts that were missing from this weeks agreement must feature prominently in the next fiscal deal, Mr. Obama said future bargains must meet his definition of balance.
Cutting spending has to go hand in hand with further reforms to our tax code so that the wealthiest corporations and individuals cant take advantage of loopholes and deductions that arent available to most Americans, Mr. Obama said in a late-night appearance in the White House press briefing room. We cant simply cut our way to prosperity.
After making his statement, Mr. Obama then departed on Air Force One overnight for Hawaii, where he rejoined his family to complete the vacation that was interrupted by the last-minute fiscal negotiating.
The legislation approved by the House late on New Years Day combines $330 billion in new spending with $3.6 trillion in extended tax breaks for most Americans, but a tax increase on the wealthiest wage earners. It raises tax rates for individuals earning more than $400,000 per year and families earning more than $450,000.
Taxpayers below those thresholds will keep their income tax cuts, although most taxpayers will see a tax increase this week because of the expiration of a 2 percent payroll tax cut.
House Republicans voted nearly 2-to-1 against the bill, arguing that it includes too much new spending and tax increases without any deficit reduction. The legislation adds about $4 trillion in deficits over the next decade.
Speaker John A. Boehner, Ohio Republican, who voted for the deal, said spending still needs to be addressed.
The federal government has a spending problem that has led to a $16 trillion national debt that threatens our countrys future, Mr. Boehner said. The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the balanced approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.
The bills approval came less than 48 hours before a new Congress is sworn in on Thursday.
Mr. Obama said the agreement enshrines a principle into law that will remain as long as I am president: The deficit needs to be reduced in a way thats balanced.
Everyone pays their fair share, Mr. Obama said. Everyone does their part. Thats how our economy works best. Thats how we grow. We cant keep cutting things like basic research and new technology and still expect to succeed in a 21st-century economy.
The president said hes willing to consider cuts in Medicare as part of the next fiscal deal, which will come to a head within two months as the federal government bumps up against its legal borrowing limit of $16.4 trillion.
The government technically already has hit that limit, but the Treasury Department is taking steps to postpone the day of reckoning until late February or early March.
The president said he wont tolerate a battle over the debt ceiling like the one he waged with House Republicans in the summer of 2011, a feud that damaged the nations credit rating and spooked financial markets.
Story Continues rarr;
View Entire Story