Though earlier in the week Democrats had hinted they'd compromise over raising tax rates on the so-called "rich," now the Obama administration is reassuring the liberal base of the Democratic Party that it stands firm by its campaign pledge of tackling the upcoming fiscal cliff with a combination of spending cuts and increasing tax rates.
White House Press Secretary Jay Carney said the president still believes in his original budget plan of raising $1.6 trillion in new revenue by raising taxes on those who make more than $250,000, and that this is the plan he'll proposed to congressional leaders when they meet at the White House to address the so-called fiscal cliff.
However, congressional Republicans have said they continue to be opposed to raising tax rates on anybody. They stand by 2012 Republican presidential challenger Mitt Romney's proposal of raising revenues by getting rid of loopholes and deductions instead.
Meanwhile, Obama believes his landslide victory — in the Electoral College count, at least — gives him the upper hand in the fiscal cliff negotiations. The president campaigned on a "balanced approach" of cutting some spending but also asking wealthier Americans "to pay a little more" in taxes in order to reduce the deficit in a "fair" way and through "shared sacrifice."
However, Republicans are unlikely to agree to this, as they claim rising taxes on anybody in what they see as a still fragile economy will hurt growth and job creation since many small businesses (the ones they say are responsible for most of the country's job creation) are taxed as individuals and could stop hiring if they're hit with a tax hike from the administration
Senator Mitch McConnell (R-Ky.) said the party is "ready to find common ground," but "we're also not about to further weaken the economy by raising tax rates and hurting jobs.” Senate Majority Leader Harry Reid (D-Nev.), on the other hand, said, "Americans are tired of division," and urged Republicans to give in on the tax-rate issue.
Obama will launch fiscal cliff negotiations Friday during a meeting with congressional leaders in the White House.