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Sunday 31 August 2014

Opposition wavers on Obama tax plan

Published 10/12/2012 | 02:34

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Barack Obama and John Boehner discussed options for avoiding the 'fiscal cliff'

Barack Obama and House of Representatives speaker John Boehner met at the White House amid talks to avert America's impending "fiscal cliff" as a growing number of Republicans in Congress appeared to be veering towards accepting the president's demand that the wealthy must pay more tax.

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Saturday's meeting was the first between just the two leaders since election day on November 6. Spokesmen for both men said they agreed to not release details of the conversation, but emphasise that the lines of communication remained open.

The meeting comes as the White House and Congress try to break an impasse over finding a way to avert the fiscal cliff, a combination of automatic tax increases and spending cuts due to kick in at the beginning of next year.

Mr Obama met Republican Mr Boehner in November as well as Senate majority leader Harry Reid and House minority leader Nancy Pelosi. The president spoke separately by telephone with Mr Reid and in person with Ms Pelosi on Friday.

The president has been pushing for higher tax rates on the wealthiest Americans as one way to reduce the deficit - a position Mr Boehner and other House Republicans have steadfastly opposed.

Republicans are demanding steeper cuts in costly entitlement programmes like government health insurance and pension payments for older people.

But one Republican senator said Senate Republicans would probably agree to higher tax rates on the wealthiest Americans if it meant getting a chance to overhaul entitlement programmes.

Tennessee's Bob Corker said he spoke for many Republicans who realised that Mr Obama holds the stronger hand on increasing taxes on the wealthy in the debate about how to avoid sending the US economy over the fiscal cliff.

Many economists and the non-partisan Congressional Budget Office predict that failure to solve the political stand-off would push the fragile American economy back into recession.

The fiscal cliff faces the country because tax rate cuts that were put in place during George Bush's administration expire at the end of the year.

Press Association

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