Obama says may see faster growth due to tax deal

Thursday, 9 December 2010 00:19 - - {{hitsCtrl.values.hits}}

WASHINGTON: US President Barack Obama came out fighting Tuesday, urging Democratic allies to back a hard-won compromise deal on tax cuts and putting Republicans foes on notice ahead of the 2012 elections.

In face of criticism from many on the left of the Democratic Party, Obama passionately defended the deal that will see tax breaks extended for the wealthiest Americans saying his critics had to take a long-term view.

"I'm as opposed to the high-end tax cuts today as I've been for years. In the long run, we simply can't afford them. And when they expire in two years, I will fight to end them," Obama vowed at a White House press conference.

Obama defiantly warned Republicans he would turn the 2012 presidential elections, when he is expected to seek a second four-year term, into a referendum on their differing economic visions.

"On the Republican side, this is their holy grail. These tax cuts for the wealthy. This... seems to be their central economic doctrine," Obama said, pledging to fight any move to make tax breaks for the wealthy permanent.

"I don't see how the Republicans win that argument. I don't know how they're going to be able to argue that extending permanently these high-end tax cuts is going to be good for our economy when to offset them we'd end up having to cut vital services for our kids, for our veterans, for our seniors."

Obama brokered a deal Monday on keeping tax cuts for all following weeks of political wrangling after major Republican gains in November's congressional polls limited his room for maneuver.

In return, Republicans agreed to a 13-month extension of jobless benefits set to expire on December 31, and which would have seen millions lose their meagre incomes as unemployment hovers just below 10 percent.

The deal has met with a frosty reception from some Democratic lawmakers, who would have preferred to see any blame for failing to reach a deal fall on Republicans.

Democratic Senate Majority Leader Harry Reid said the agreement was "only a framework" and vowed to work with the White House and Republicans in a bid to address "wide-ranging" concerns among his rank-and-file.

"It's something that's not done yet. Let's make that clear. We're working through all this," he told reporters after Vice President Joe Biden made the case for the deal in the closed-door Senate Democrats' weekly lunch.

But Obama argued that doing nothing was not an option, and taking a "purist position" meant the American people would be the losers.

"If we don't get my option through the Senate right now and we do nothing, then on January 1st of this 2011, the average family is going to see their taxes go up about 3,000 dollars," he warned.

"At any given juncture, there are going to be times where my preferred option, what I'm absolutely positive is right, I can't get done," the US president said, stabbing his finger for emphasis.

"And so then my question is, does it make sense for me to tack a little bit this way or tack a little bit that way because I'm keeping my eye on the long term and the long fight."