Skip to main content
Part of complete coverage on

Obama warns of 'Scrooge' Christmas without tax-cut extension

By the CNN Wire Staff
updated 10:20 PM EST, Fri November 30, 2012
  • NEW: No talks between White House and congressional leaders are set, an official says
  • President Barack Obama urges quick deal on tax-cut extension for most Americans
  • Republicans are balking at Obama's first proposal, including $1.6 trillion in revenue increases
  • Nancy Pelosi predicts 100% of House would back a "middle-class" tax cut

Hatfield, Pennsylvania (CNN) -- After touring a Pennsylvania toy factory that's churning out would-be holiday gifts, President Barack Obama warned Friday of a "Scrooge" Christmas if Congress does not pass legislation extending tax cuts for 98% of Americans.

The visit and speech were part of Obama's campaign-like push to curry public support for his plan to avert the so-called fiscal cliff and the automatic tax increases and spending cuts that would come with it.

"Let's get that done," Obama said of approving tax cuts for most Americans, while letting rates for the top 2% go up. "Let's go ahead and take the fear out for the vast majority of American families so they don't have to worry about $2,000 coming out of their pockets next year."

In Washington, House Speaker John Boehner, R-Ohio, raised alarms about an impasse a month before the fiscal cliff would set in, to the detriment of the nation's fragile economic recovery, many economists warn.

Sen. Rand Paul: Cut military spending
Boehner: 'There's a stalemate'
Fiscal cliff could harm schools

"There's a stalemate. Let's not kid ourselves," Boehner said.

As of early Friday evening, no talks were planned between the White House and congressional leadership to avert what could happen in January, an official familiar with the situation said.

With little evidence of a breakthrough, Obama has tried to amp up pressure on Republicans by making his pitch public. The Rodon Manufacturing Group plant in Hatfield that he visited makes K'Nex toys, which Obama jokingly offered to members of Congress who make his "nice" list.

Not on that list are many House Republicans.

How to raise taxes on the rich

The Democratic-controlled Senate has already passed legislation calling for the extension of tax cuts for all but the most wealthy Americans, but the matter has not come up for a vote in the House.

Republicans who control that chamber, many of whom oppose any tax rate increases, have insisted the tax-cut extensions apply to all Americans and balked at considering separately the tax cut that applies to 98% of Americans. Obama says House Republicans are holding "hostage" something that would help the vast majority of the country to protect the wealthy few.

"That doesn't make sense," the president said, urging Americans to flood House Republicans with calls, letters and social networking messages.

Addressing the tax-cut extension for lower- and middle-class families is the most urgent "ticking clock" among the provisions in the "fiscal cliff" package of automatic tax increases and spending cuts that will take effect January 1 if lawmakers and the administration can't reach a compromise, Obama said.

Without the cut, the administration has argued many Americans could pull back on purchasing during the crucial holiday shopping season.

Longer term, analysts and the Congressional Budget Office have said that going and staying over the fiscal cliff -- meaning the tax hikes for all and spending cuts aren't pulled back -- would threaten millions of jobs, especially those dependent on government contracting, and risk a return to recession.

Wall Street and big businesses are lobbying the administration and lawmakers to reach a deal. Investors have been grappling with the uncertainty over the prospect of higher taxes and damaged consumer confidence caused by political gridlock over deficits and the debt.

Ellison won't hurt interests of poor
Matalin: Obama's proposal despicable

House Minority Leader Nancy Pelosi said the election and polls show public support for extending the "middle class" tax cut while raising rates for the wealthiest.

She and her caucus are ready to solicit the support of some Republicans in amassing 218 signatures to bring the Senate tax-cut extension bill up for a vote next week.

"I think we would get a 100% vote on it if it came to the floor," the California Democrat said Friday.

How to bridge the fiscal cliff

The remarks came a day after the Obama administration unveiled details of a comprehensive package, widely rejected by Republicans, to avert the fiscal cliff.

The president's proposal calls for $1.6 trillion in increased revenue, some of it the result of higher tax rates for families making more than $250,000.

Obama also wants to close loopholes, limit deductions, raise the estate tax rate to 2009 levels and increase taxes on capital gains and dividend taxes.

The proposal also calls for additional spending, including a new $50 billion stimulus package, a home mortgage refinancing plan and an extension of unemployment insurance benefits. It would also extend the payroll tax cut passed early in Obama's administration to give taxpayers more money to spend.

In return, multiple sources told CNN that Obama is offering $400 billion in new cuts to Medicare and other entitlement programs. Specifics on cuts would be decided next year, the sources said.

Boehner characterized Obama's proposal for spending cuts as a trifle, calling for "a little, not even $400 billion" in cuts to the $3.8 trillion federal budget.

"It was not a serious proposal," he said.

Republican aides also said the $1.6 trillion in increased revenue was higher than previously discussed. Democrats said the number should not be a surprise, as Obama discussed it during his re-election campaign.

On the campaign trail, the president also repeatedly said the wealthiest Americans should pay more than they do now to help lower the national debt.

10 ways falling off the fiscal cliff could hurt your health

CNN's Jessica Yellin, Deirdre Walsh, Ted Barrett, Kate Bolduan, Paul Steinhauser and Dan Lothian contributed to this report.

Part of complete coverage on
updated 10:26 AM EST, Wed February 6, 2013
Advocates say the exam includes unnecessarily invasive and irrelevant procedures -- like a so-called "two finger" test.
updated 7:09 PM EST, Tue February 5, 2013
Supplies of food, clothing and fuel are running short in Damascus and people are going hungry as the civil war drags on.
updated 1:01 PM EST, Wed February 6, 2013
Supporters of Richard III want a reconstruction of his head to bring a human aspect to a leader portrayed as a murderous villain.
updated 10:48 AM EST, Tue February 5, 2013
Robert Fowler spent 130 days held hostage by the same al Qaeda group that was behind the Algeria massacre. He shares his experience.
updated 12:07 AM EST, Wed February 6, 2013
As "We are the World" plays, a video shows what looks like a nuclear attack on the U.S. Jim Clancy reports on a bizarre video from North Korea.
The relationship is, once again, cold enough to make Obama's much-trumpeted "reset" in Russian-U.S. relations seem thoroughly off the rails.
Ten years on, what do you think the Iraq war has changed in you, and in your country? Send us your thoughts and experiences.
updated 7:15 AM EST, Tue February 5, 2013
Musician Daniela Mercury has sold more than 12 million albums worldwide over a career span of nearly 30 years.
Photojournalist Alison Wright travelled the world to capture its many faces in her latest book, "Face to Face: Portraits of the Human Spirit."
updated 7:06 PM EST, Tue February 5, 2013
Europol claims 380 soccer matches, including top level ones, were fixed - as the scandal widens, CNN's Dan Rivers looks at how it's done.
updated 7:37 AM EST, Wed February 6, 2013
That galaxy far, far away is apparently bigger than first thought. The "Star Wars" franchise will get two spinoff movies, Disney announced.
updated 7:27 PM EDT, Fri July 25, 2014
It's an essential part of any trip, an activity we all take part in. Yet almost none of us are any good at it. Souvenir buying is too often an obligatory slog.