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Obama rejects 'out of balance' GOP fiscal plan

(Xinhua) Updated: 2012-12-05 05:11

WASHINGTON - US President Barack Obama on Tuesday rejected a Republican proposal to avert the looming fiscal cliff and insisted that any deal must include a rise in income tax rates on the wealthiest Americans.

In an interview with Bloomberg Television Tuesday, Obama said the Republicans' proposal to raise $800 billion in tax revenue without letting the tax rates go up for the top earners does not add up.

"We have the potential of getting a deal done. But it's going to require what I talked about during the campaign, which is the balanced, responsible approach to deficit reduction," Obama said in the interview.

The GOP proposal right now is "still out of balance," he said, adding that the math just doesn't work for the plan to raise tax revenue only through capping tax deductions and closing loopholes.

The Obama administration presented to Capitol Hill its opening bid on debt reduction last week, which would raise 1.6 trillion dollars in new tax revenue over the next decade and cut 400 billion dollars on spending of entitlement programs. The plan was dismissed by the Republicans as "not serious."

The top Republicans on Monday presented their counteroffer to Obama in fiscal cliff negotiations, proposing 800 billion dollars increase in tax revenue and about 1.4 trillion dollars in spending cuts. The White House immediately rejected the proposal.

As political pressure mounts, the Democrats and Republicans are still far apart. Obama continued to insist on higher tax rates for top earners while Republicans press for spending cuts in entitlement programs. With two offers on the table, the parameters for future talks on fiscal cliff are becoming clearer.

Obama also said in the interview that they are not going to be able to come up with comprehensive tax reform and entitlement reform package in next two weeks. He preferred to make a "down payment" in the fiscal negotiations by letting the top earners tax rates go up.

"And then let's set up a process with a time certain, at the end of 2013 or the fall of 2013, where we work on tax reform, we look at what loopholes and deduction both Democrats and Republicans are willing to close, and it's possible that we may be able to lower rates by broadening the base at that point," he added.

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