WASHINGTON — US President Barack Obama on Wednesday called for a deal with Republicans before Christmas on averting a tax and deficit crunch that it is feared could pitch the economy into recession.
Obama gathered middle class families at the White House to up his campaign for Republicans to join Democrats in Congress to pass an extension to tax cuts for most Americans, while bowing to his pressure to raise rates on top earners.
“I want to make sure everybody understands this debate is not just about numbers. It’s a set of major decisions that are going to affect millions of families all across this country in very significant ways,” Obama said.
“Our ultimate goal is an agreement that gets our long-term deficit under control in a way that is fair and balanced.
“I believe that both parties can agree on a framework that does that in the coming weeks. In fact, my hope is to get this done before Christmas.”
If there is no agreement before the end of the year, taxes on all Americans will rise, raising the prospect of a sudden draining of consumer spending and fears that the still fragile economy could be thrown back into recession.
Obama also called on Americans to mobilize to support his position, just weeks after his re-election triumph, by posting on Facebook and sending tweets marked with the hashtag #My2K.
“Tell members of Congress what a $2,000 tax hike would mean to you,” he said.
Obama was later to huddle with top CEOs at the White House, including Lloyd Blankfein, CEO of investment giant Goldman Sachs, and Yahoo! chief executive Marissa Mayer, as part of his campaign for a debt and deficit deal.
On Friday, he will crank up pressure on Republicans even more by making a campaign-style trip to a manufacturing business in Pennsylvania.
The year-end deadline is the result of legislation passed when Republicans and Democrats failed to reach a previous long-term deficit and budget deal, and was meant to concentrate minds of lawmakers and spur compromise.
Obama campaigned on a platform of raising taxes on individuals who make more than $200,000 per year and families that rake in more than $250,000, as a way of raising extra revenue to tame the deficit.
Republicans insist that raising taxes on the wealthy would be counter-productive, would hurt small business owners, and would slow economic growth and dampen job creation.
The parties are also feuding about where to cut expenditures, with some Republicans opposed to any trimming of the military budget and Democrats guarding social safety net entitlement programs.