Updated: December 7, 2012 9:30AM
We like this new President Barack Obama.
Assured and direct, Obama is refusing to yield to Republicans on a core idea he ran — and won — on: increasing the tax rate for America’s top earners.
Though Obama scored a relatively narrow victory on Nov. 6, he can claim a clear mandate in this area.
No one could have missed Obama’s simple message over the last year on the Bush-era tax cuts: Let them expire for just the wealthiest top 2 percent of taxpayers. All who earn below $250,000 would carry on at a lower rate.
Despite that, congressional Republicans led by House Speaker John Boehner are balking. A plan they proposed earlier this week to avoid the Jan. 2 “fiscal cliff” only includes curbing tax deductions. The GOP plan would amount to $800 billion in new tax revenue over 10 years. Letting tax cuts expire for the wealthiest would generate twice that, $1.6 billion.
Failure to strike a deal will result in a tax hike for all and severe spending cuts that could trigger a new recession. Both Obama and the GOP also propose spending cuts as part of any long-term deficit-reduction plan, though there is no agreement on particulars.
Raising tax rates on top earners is Obama’s starting point in the fiscal cliff negotiations. And apparently, he’s willing to make it his end point as well.
“We’re not going to be able to get a deal without it,” Obama told Bloomberg Television on Tuesday.
Reinvigorated after the vote, Obama is taking a new tack with the Republicans, who get credit for coming around to the notion that any deal will require new tax revenue. Instead of endless negotiations, Obama has drawn his line in the sand and is standing firm on tax rates for top earners. He’s doing the same with Republican attempts to gain leverage by potentially refusing to raise the government’s debt limit next year. Last time that happened, in 2011, Congress brought the U.S. to the brink of default.
After Obama was re-elected, we said our nation desperately needs a grand bargain, one that combines increased tax revenues with bold spending cuts. That is what Obama ran on, and he now has every right and obligation to fight to the end to get it.