Obama takes push for higher taxes on wealthy to workers at Michigan plant

During a visit to Detroit’s Diesel plant on Monday, President Obama warned of tax hikes if Congress does not reach a “fiscal cliff” agreement in the next two weeks. He continued to press higher tax rates for the wealthiest Americans, saying “they’re not strapped” and could afford it. (The Washington Post)

President Obama hit the campaign trail again on Monday — more than a month after the election — firing up a crowd of blue-collar automotive workers with calls to raise taxes on the wealthy and eagerly wading into a local political dispute over the powers of labor unions.

The visit to Michigan was the latest stop in a public-­relations effort by the White House aimed at harnessing Obama’s popularity across the country to generate momentum behind his plan to avoid the “fiscal cliff.” Shortly before Obama landed in Detroit, his still-active reelection campaign sent out a plea urging millions of supporters to pressure House Republicans to back the president’s approach.

Obama’s appearance at Daimler’s Detroit Diesel plant, which builds truck engines, came as negotiations accelerated in Washington over the fiscal cliff: more than $500 billion in automatic tax hikes and spending cuts set to hit in January. One day after meeting privately with House Speaker John A. Boehner (R-Ohio) at the White House — their first one-on-one meeting since the election — Obama telephoned Senate Majority Leader Harry Reid (D-Nev.). It was his second conversation with the Senate leader in four days.

Obama met Friday with House Minority Leader Nancy Pelosi (D-Calif.). People close to the talks said it appeared that Obama was making progress in talks with Boehner toward a far-reaching deficit-reduction plan that would generate fresh tax revenue and reduce the soaring cost of federal health programs.

Neither the White House nor aides to Boehner would comment on the developments, often a sign that things are advancing behind the scenes. In public, however, senior aides played out the same dispute over taxes that has blocked a deal since Obama won reelection. Boehner has offered to generate as much as $800 billion in fresh revenue over the next decade by limiting deductions for the wealthy, but he and other Republicans have drawn a hard line against raising the top 35 percent tax rate.

“The Republican offer made last week remains the Republican offer, and we continue to wait for the president to identify the spending cuts he’s willing to make as part of the ‘balanced’ approach he promised the American people,” Boehner spokesman Michael Steel said in a statement.

“There is no deal without acknowledgment and acceptance of the fact that rates are going up on top earners,” White House press secretary Jay Carney told reporters en route to Detroit.

But by Monday evening Obama’s and Boehner’s respective allies on Capitol Hill were growing anxious about the ongoing talks. Democrats were concerned that the White House may be giving in to GOP demands to apply a less generous measure of inflation to Social Security benefits and raise the eligibility age for Medicare, while Republicans were fearful of a deal yielding more than $1 trillion in new revenue. Top GOP aides were also annoyed by what they said was a move by the White House to adjust the revenue target downward from $1.6 trillion to $1.2 trillion over the next decade — and then jacking it back up again Monday to $1.4 trillion.

The president, speaking to a crowd of several hundred assembly-line workers in Detroit, exhorted GOP lawmakers to agree to a deal that would raise income tax rates on the top 2 percent of earners but protect middle-income Americans from automatic tax increases set to begin in January. He repeatedly echoed themes from his reelection campaign — including its main slogan, “Forward.”

“We’re moving in the right direction,” Obama said. “We’re going forward. So what we need to do is simple: We need to keep going — we need to keep going forward.”

Obama also took the unusual step of weighing in on state legislation championed by Michigan Republicans, who are moving to adopt right-to-work policies that would effectively ban unions from requiring workers to pay dues. Obama won Michigan by nearly 10 points in part because of support from the powerful United Auto Workers, and he rallied to their cause in his remarks Monday.

“What we shouldn’t be doing is trying to take away your rights to bargain for better wages and working conditions,” Obama said to enthusiastic applause. He added: “These so-called ‘right to work’ laws, they don’t have to do with economics; they have everything to do with politics. What they’re really talking about is giving you the right to work for less money.”

The Republican proposal could become law as early as Tuesday, when Michigan’s GOP-controlled House and Senate are expected to take up the measure for final passage. Gov. Rick Snyder (R), who for the past two years said right-to-work legislation was too divisive to be on his agenda, abruptly switched sides last week and said he would sign the union-limiting bill if it comes to his desk.

Snyder was among the dignitaries who greeted Obama when he stepped off Air Force One at Detroit Metro Airport.

During his visit here, Obama toured the Daimler plant, which announced a $120 million expansion Monday. In another echo of the campaign just concluded, Obama made a point of noting the 2009 federal rescue of the auto industry.

“The word’s gone out, all around the world: If you want to find the best workers in the world . . . you should invest in the United States of America,” Obama said.

Not long before Obama spoke in Michigan, his deputy campaign manager, Stephanie Cutter, sent an e-mail to millions of supporters urging them to target House Republicans who oppose the president’s plan to raise tax rates on the wealthy. The entreaty included a detail “call script” to use on other Democrats encouraging them to call their members of Congress.

“We know we can affect change in Washington when we raise our voices together,” Cutter wrote in the e-mail. “So pick up the phone and make a few calls. Republicans in the House need to hear from their constituents.”

Obama’s plan would raise rates on net income over $250,000 while keeping rates the same on income below that level. Rates on all income levels are slated to rise automatically in January if a deal is not reached.

Paul Kane in Washington contributed to this report.

Lori Montgomery covers U.S. economic policy and the federal budget, focusing on efforts to tame the national debt.
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