US President Barack Obama has blamed congressional Republicans for the so-called fiscal cliff deadlock, saying their refusal to raise taxes on the rich is the main obstacle to finding a solution to the looming economic crisis.
“They (Republicans) say that their biggest priority is making sure that we deal with the deficit in a serious way, but the way they’re behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected,” Obama said in a prerecorded interview for NBC’s “Meet the Press” program that was broadcast on Sunday.
“That seems to be their only overriding, unifying theme,” the US president added.
Obama also warned that the failure to reach a deal on taxes and spending cuts would have serious consequences for the US economy.
“If people start seeing that on 1 January this problem still hasn’t been solved, that we haven’t seen the kind of deficit reduction that we could have had, had the Republicans been willing to take the deal that I gave them…then obviously that’s going to have an adverse reaction in the markets,” he said.
The president noted said the priority was to ensure taxes do not rise for middle-class families, saying that would “hurt our economy badly.”
“That’s something we all agree on. If we can get that done, that takes a big bite out of the fiscal cliff,” he said.
In response to Obama’s comments, House Speaker John Boehner issued a statement, saying Obama should not cast blame on Republicans for a possible failure to avert the nearing crisis and that the president was equally responsible.
“Americans elected President Obama to lead, not cast blame,” the top Republican in Congress said shortly after the prerecorded interview.
“Republicans made every effort to reach the ‘balanced’ deficit agreement that the president promised the American people, while the president has continued to insist on a package skewed dramatically in favor of higher taxes that would destroy jobs,” Boehner added.
The fiscal cliff refers to a combination of tax increases and spending cuts that are set to come into force on January 1, unless Republicans and Democrats can come together with an alternative budget plan. Economists warn that such a shock could send the economy back into recession.
Republicans and Democrats are still at loggerheads over the terms of a deal on how to avoid $680 billion in automatic increases in taxes and spending cuts.
Talks between Obama and congressional leaders collapsed on December 20 when Republicans abandoned House Speaker John Boehner’s backup plan, which called for raising taxes on those making more than $1 million a year.
The responsibility for crafting new budget legislation then fell to the Senate. However, efforts by Senate Democratic Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell to reach a last-minute agreement suffered a setback as the two leaders missed their own Saturday deadline of 15:00 local time (20:00 GMT) to arrive at an agreement.
The growing worries and pessimism have already impacted US consumer confidence. A report, released on December 20, showed that consumer confidence index fell to a four-month low in December amid American public’s fear that the economy would fall over the fiscal cliff.
“People are hearing about [the cliff] and it negatively impacts confidence and investor sentiment and even holiday sales,” Todd Schoenberger, managing partner at Landcolt Capital in New York, has said.