Obama pushes for middle class tax cuts

US President Barack Obama urged Congress Saturday to immediately extend a tax cut for middle class Americans, arguing the move will give 98% of families and 97% of small businesses certainty that will lead to faster economic growth.

"Congress can do that right now. They can give families like yours a sense of security going into the New Year," Obama said in his weekly radio and Internet address.

The president made the comments one day after he traveled to a toy factory in Pennsylvania to press his case for a plan to stop the US economy tipping off the so-called fiscal cliff, when automatic tax hikes and across-the-board spending cuts come into force on January 1.

Republicans have rejected Obama's first offer to end the stalemate surrounding the matter as "ridiculous" and negotiations between the two sides have hit a roadblock with just a month to go, punctuated by the holiday season, until the deadline.

Top Republican John Boehner, speaker of the House of Representatives, has warned that talks on averting a year-end tax and spending crunch, which could tip the economy back into recession, are going nowhere.


The showdown is a crucial test for newly re-elected Obama in gridlocked Washington, with implications for his capacity to enact an ambitious second term agenda.

Obama campaigned on raising taxes on households earning $250 000 a year or more to pay for deficit reductions and to fund education spending and other plans to boost the economy and improve life for the nation's middle class.

But congressional Republicans have opposed tax increases of any kind.

In his address, the president said it was "unacceptable" for Republicans to "hold middle class tax cuts hostage" because they refuse to let tax rates go up on the wealthiest Americans.

But he suggested that Congress, as a first step, do what both parties agree on and pass a bill that would keep middle class taxes low.

Obama said the Senate had already passed such a measure, and that Democrats in the House were ready to do the same.

"And if we can just get a few House Republicans on board, I'll sign this bill as soon as Congress sends it my way," the president promised.

However, Republican Senator Orrin Hatch of Utah said in a weekly Republican address that comprehensive tax reform and reducing the unsustainable debt were crucial to fixing the "fiscal cliff" problem.

"The President has said he wants a so-called balanced approach to solve this crisis," he said. "But what he proposed this week was a classic bait and switch on the American people – a tax increase double the size of what he campaigned on, billions of dollars in new stimulus spending and an unlimited, unchecked authority to borrow from the Chinese." – Sapa-AFP.

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