Obama urges public pressure on tax rates

President Barack Obama, speaking Friday at a toy manufacturer, urged Americans to get involved in his push to keep lower tax rates for middle-class taxpayers. "The key is, the American people have to be involved," Obama said at The Rodon Group in Hatfield, Pa., the only U.S. manufacturer of K'NEX building toys. "It's not enough for me to do this on my own." At the Capitol, House Speaker John Boehner, R-Ohio, said talks about averting the looming fiscal cliff are at a stalemate and said a White House proposal wasn't serious. "There's a stalemate. Let's not kid ourselves," Boehner told a news conference. "Right now we're almost nowhere." If Congress takes no action by the end of the year, the lower income tax rates enacted during the administration of former President George W. Bush will expire and Obama said that would result in a $2,200 increase in the average middle-class family's tax bill. The prospect of higher income-tax rates and legislated federal spending cuts across the board have come to be known as the fiscal cliff. Economists estimate one consequence of the fiscal cliff would be that the middle class will spend about $200 billion less in stores and online. "That's not good for our businesses, it's not good for our economy and it's not good for employment," Obama said. The second option is that Congress could pass legislation that would preserve current income tax rates on the first $250,000 of everyone's income while allowing lower rates to expire only on the portion of one's income exceeding that amount. "The sooner Congress gets this done, the sooner the economy will get a boost," Obama said. It also would give Washington time to work on a plan to bring down the deficit through tax reform, looking at entitlement programs and asking the wealthy to pay "a little more," Obama said. "I need you to remind members of Congress ... to not get bogged down in bunch of partisan bickering ... but to focus on the people who sent them to Washington," Obama said. He urged Americans to call, email, send comments via Facebook or tweet using #My2K "because it's about your 2K in your pocket." His plan to let the Bush tax rate for the wealthiest taxpayers expire "was a central question in the election -- we talked about this a lot," Obama said. "This shouldn't come as a surprise to anybody. At the end of the day, a clear majority of Americans -- Democrats, Republicans and Independents -- agreed with a balanced approach to deficit reduction," the president said. "We say we don't want middle-class taxes to go up. Let's get that done," Obama said, noting that both sides have disagreements on taxes for the wealthy. The Senate already has passed such a bill and Democrats in the House are "ready to go," the president said. Obama's plan would raise roughly $1 trillion over 10 years by allowing tax rates on income over $250,000 to expire. It would raise another $600 billion over 10 years by changing the tax code, including tax-break limits for those households. Boehner said raising taxes on small businesses without cutting spending "is wrong." "Republicans are not seeking to impose our will on the president," Boehner said "We're seeking a bipartisan solution that can pass both chambers of Congress" and be signed into law. He noted he said the day after Election Day Republicans were willing to put revenue on the table in the forms of tax code reform, closing loopholes and eliminating special-interest deductions while the White House took three weeks before releasing its alternative to averting the fiscal cliff, the confluence of expiring tax cuts, credits and deductions and across the board spending cuts. Then, what the White House proposed "wasn't a serious one," the Ohio Republican said, noting it called for $1.6 trillion in new taxes and less than half that in spending cuts. "Still I'm willing to move forward in good faith," he said, adding later, "The American people expect us to find common ground ... frankly, sooner better than later." Treasury Secretary Timothy Geithner briefed congressional leaders Thursday. Obama's plan also calls for a one-year postponement of planned spending cuts in defense and domestic programs in exchange for increasing tax rates on those with income of more than $250,000 and some $400 billion in savings over 10 years from Medicare and other programs, GOP aides told The Wall Street Journal.