US President Barack Obama said last night he still disagreed with Republicans on whether to extend Bush-era tax cuts for the wealthiest Americans, but the two sides agreed to negotiate a deal in the coming days.
Obama said he appointed Treasury secretary Tim Geithner and budget director Jack Lew to work with congressional Republicans and Democrats to come up with a compromise to prevent broad tax increases from occurring next year.
“We should work to make sure that taxes will not go up by thousands of dollars on hard-working middle-class Americans come 1 January, which would be disastrous for those families but also could be crippling for the economy,” Obama said after a meeting with congressional leaders at the White House.
“There was broad agreement that we need to work to get that resolved before the end of the year.”
If no agreement is reached, all tax-paying Americans could see higher bills next year, giving Republicans a chance to score politically by making tax cuts their priority when taking control of the House of Representatives in January.
Finding common ground before that time will be tricky.
Obama said he and many Democrats continued to believe that it would be “unwise and unfair” to spend $700bn (£450bn) to extend tax cuts for the wealthiest Americans while trying to reduce the US deficit.
Republican leaders, emboldened by gains in the mid-term elections, argued that it would be better for the economy if tax cuts for all Americans were extended. The so-called Grand Old Party won a majority in the House in the 2 November elections, but the Democrats still control the Senate.
City A.M. Reporter