Barack Obama has challenged Republicans in Congress not to hold America's economy to ransom in order to defend tax cuts for millionaires, as he delivered his opening gambit in negotiations to stop the US hurtling over the so-called "fiscal cliff".
In his first address since his re-election on Tuesday, Mr Obama said he had won a mandate to implement his plan to make those earning more than $250,000 (€196,000) a year pay higher taxes to help reduce America's $1.2tn (€0.94tn) budget deficit.
"On Tuesday night, we found out that a majority of Americans agree with my approach," Mr Obama said, in a news conference at the White House. "Our job now is to get a majority in Congress to reflect the will of the American people."
Pulling a pen from the inside of his blazer, he added: "I've got my pen. I'm ready to sign the bill right away. I'm ready to do it. I'm ready to do it."
According to a pact by both parties last year, Congress and the president must reach a deal to rein in America's spiralling deficit by December 31 or trigger punitive tax rises and swinging cuts to public spending.
An attempt to reach a comprehensive deal last year foundered on the refusal of Republicans, who control the House of Representatives, to raise taxes on any Americans, including the 35pc top rate for the highest earners -- a position they remain wedded to.
Announcing that he had invited Republican leaders to the White House for talks next week, Mr Obama said that while he was "open to compromise", he would "refuse to accept any approach that is not balanced" between reducing spending and raising tax revenues.
"We can't just cut our way to prosperity," said Mr Obama. "We have to combine specific cuts with revenue, and this means asking the wealthiest to pay a little more in taxes. This is how we did it in the 1990s when Bill Clinton was president."
The high stakes of the negotiations were laid out by a report this week from the independent Congressional Budget Office, which predicted that the US would slump back into recession and that unemployment would jump from 7.9 to 9.1 pc if the cliff was not averted.
The Republicans had set out their own stall just two hours before the president spoke, urging that the fiscal cliff be "parked" until after Mr Obama's second inauguration in January and ruling out any increase in headline tax rates.
John Boehner, the Republican speaker of the house, told a press conference that he would prefer extending all the Bush-era tax cuts until 2013, arguing that a "lame duck" Congress should not make such momentous decisions.
"I'm proposing that we avert the fiscal cliff together in a manner that ensures that 2013 is finally the year that our government comes to grips with the major problems that are facing us," Mr Boehner said.
Mr Obama instead urged immediate action to extend existing tax rates for all Americans earning less than $250,000 to avert a consumer slump.
"That one step would give millions of families -- 98pc of Americans -- the certainty that they need going into the new year," he said. The measure has been passed by the Democratic-controlled Senate.
However, the Republicans fear that agreeing to this short-term tide-over would inevitably leave them pressured to strike a long-term deal along similar lines, but risk being painted as the party willing to allow taxes to increase on the poor in order to defend the wealthiest.
(© Daily Telegraph, London)