President Obama gave these remarks, regarding the fiscal cliff and extending middle class tax cuts, on December 8, 2012.
[Editor's Note: Click here for more CFR 2012 resources examining the foreign policy and national security dimensions of the presidential transition.]
Hello, everybody. Over the last few weeks, there's been a lot of talk about deadlines we're facing on jobs and taxes and investments. But with so much noise and so many opinions flying around, it can be easy to lose sight of what this debate is really about. It's not about which political party comes out on top, or who wins or loses in Washington. It's about making smart decisions that will have a real impact on your lives and the lives of Americans all across the country.
Right now, middle-class tax cuts are set to expire at the end of the year. Time is running out. And there are two things that can happen.
First, if Congress does nothing, every family in America will see their income taxes automatically go up on January 1st. A typical middle-class family of four would get a $2,200 tax hike. That would be bad for families, it would be bad for businesses, and it would drag down our entire economy.
Now, Congress can avoid all this by passing a law that prevents a tax hike on the first $250,000 of everybody's income. That means 98 percent of Americans and 97 percent of small businesses wouldn't see their income taxes go up by a single dime. Even the wealthiest Americans would get a tax cut on the first $250,000 of their income. And families everywhere would enjoy some peace of mind.
The Senate has already done their part. Now we're just waiting for Republicans in the House to do the same thing. But so far, they've put forward an unbalanced plan that actually lowers rates for the wealthiest Americans. If we want to protect the middle class, then the math just doesn't work.
We can and should do more than just extend middle class tax cuts. I stand ready to work with Republicans on a plan that spurs economic growth, creates jobs and reduces our deficit – a plan that gives both sides some of what they want. I'm willing to find ways to bring down the cost of health care without hurting seniors and other Americans who depend on it. And I'm willing to make more entitlement spending cuts on top of the $1 trillion dollars in cuts I signed into law last year.
But if we're serious about reducing our deficit while still investing in things like education and research that are important to growing our economy – and if we're serious about protecting middle-class families – then we're also going to have to ask the wealthiest Americans to pay higher tax rates. That's one principle I won't compromise on
After all, this was a central question in the election. A clear majority of Americans – Democrats, Republicans and Independents – agreed with a balanced approach that asks something from everyone, but a little more from those who can most afford it. It's the only way to put our economy on a sustainable path without asking even more from the middle class. And it's the only kind of plan I'm willing to sign.
Everyone agrees we need to bring down our deficit and strengthen our economy for the long-term. The question is whether we can do it in a responsible way that allows us to keep investing in the things that have always made America strong. I'm convinced we can. And if both sides are willing to compromise, I believe we can give businesses and families a sense of security going into the New Year.
Thanks, and have a great weekend.