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Obama: Congress must produce ‘cliff' deal

Dec. 30, 2012 - 12:16PM   |   Last Updated: Dec. 30, 2012 - 12:16PM  |  
President Obama speaks following a meeting with congressional leaders on Dec. 28.
President Obama speaks following a meeting with congressional leaders on Dec. 28. (Mandel Ngan / AFP via Getty Images)
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WASHINGTON — President Obama said he remains hopeful Congress will reach a deal to avert the "fiscal cliff," but he reiterated his call for a vote on his plan to extend middle class tax rates if Congress fails.

"Now the pressure's on Congress to produce," Obama said Sunday on NBC's Meet The Press. It was the president's first appearance on the show since 2009.

Congress reconvenes Sunday. Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., have been tasked with finding a legislative path to head off the automatic tax hikes and spending cuts set to take effect Jan. 1.

Lawmakers in both parties were optimistic that Senate leaders could find an agreement that could pass both chambers. House Speaker John Boehner, R-Ohio, has said he will not take up a bill unless the Senate can pass it first.

"There are certainly no breakthroughs yet … but there's certainly a possibility of a deal," Sen. Charles Schumer, D-N.Y., said on ABC's This Week. "Responsible people on both sides of the aisle do need to try and come together," said Sen. Jon Kyl, R-Ariz., who appeared with Schumer.

Schumer said Reid and McConnell were working on a framework to extend for the middle class the tax rates enacted under President George W. Bush. The revenues gained from higher rates on the wealthy would be used to pay down the automatic spending cuts triggered Jan. 2 in order to protect defense and social programs.

Less public attention has been paid to the impending spending cuts — which were enacted as a backstop after Congress failed to find a deficit reduction agreement on its own — but lawmakers voiced increasing concerns about the impact of the cuts if they occur unaltered.

Sen. Lindsey Graham, R-S.C., told Fox News Sunday that he spoke Saturday evening with Defense Secretary Leon Panetta, who voiced concerns about the impending $54 billion in defense cuts for 2013. "He's worried to death," Graham said.

So far, partisan gridlock has left Washington unable to bridge the two parties' philosophical differences on taxes. The president has called for an extension of the current Bush-era rates for households earning $250,000 or less, which affects about 98% of earners.

Republicans, particularly in the House, have resisted any proposal that would allow tax rates to rise, including a failed effort by Boehner to pass a bill that protected the current tax rates for earners making less than $1 million. Republicans want more spending cuts, particularly from costly entitlement programs like Medicare, which Democrats have been unwilling to cede.

If Congress is unable to send him a proposal, Obama said he will insist that Congress vote on his own, scaled-back plan to extend tax rates and expiring unemployment insurance benefits affecting 2.1 million Americans. Reid said Friday that if he and McConnell can't come to terms on an agreement, he would bring Obama's proposal to the floor on Monday.

"If we can get that done, that takes a big bite out of the fiscal cliff," Obama said. "It avoids the worst outcomes. And we're then going to have some tough negotiations in terms of how we continue to reduce the deficit, grow the economy, create jobs."

Obama granted the Meet The Press interview in part to pressure Congress — particularly the Republicans — into signing off on a fiscal cliff agreement. NBC taped the interview at the White House on Saturday afternoon.

The president said he has put up fair offers to the Republicans in the past — "they have had trouble saying yes" — and made clear he would blame the GOP if taxes rise while the government falls over the cliff.

"If Republicans don't like it, they can vote no," Obama said. "But I actually think that there's a majority support for making sure that middle class families are held harmless."

Managing the fiscal cliff is essential to improving the economy, Obama said. The nation is poised to improve economic growth in 2013, he said, "but what's been holding us back is the dysfunction here in Washington."

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