How Did The Fiscal Cliff Get Resolved? The U.s. Economy, Finance And Tax Cuts - 2012 - 13

good afternoon everybody for the last few weeks i've been working with leaders of both parties on a proposal to get our deficit under control the board tax cuts serve or tax hikes on the middle class and make sure that we can spur jobs economic growth balance proposal that cut spending but also asks the wealthiest americans to pay more uh... proposal that will strengthen the middle class over the long haul uh... and or comic over the long haul the course of these negotiations offered a compromise with republicans in congress a map of halfway on taxes and i met them more than half way on spending in terms of actual dollar amounts were not that far apart uh... as of today uh... i'm still ready and willing a comprehensive package dot i still believe that reducing our deficit is the right thing to do for the long-term health of our economy in the confidence of our businesses i remain committed to working towards that goal whether it happens all the once or whether it happens in several different steps in ten days we face a deadline in ten days under current law tax rates are scheduled to rise on most americans and even though democrats republicans are arguing about whether those rate should go up for the wealthiest individuals all of us every single one of us agrees that tax rates shouldn't go up the other ninety eight percent of americans which includes ninety seven percent small businesses every member of congress believes that every democrat every republican so there is absolutely no reason not to protect these americans from attacks like at the very least let's agree right now what we already agree on let's get that done i'd just go to speaker bear uh... and i also met with summary the next few days of s leaders of congress to work towards a package that prevents a tax like on middle-class americans protects unemployment insurance for two million americans lays the groundwork for further work on both growth and deficit reduction that's an achievable goal that can get done in ten days once this legislation's agreed to expect democrats and republicans to get back to washington passed both chambers and i will media leased signed that legislation into law before january of next year averting this middle-class tax hike is not a democratic responsibility or his republican responsibilty with their votes the american people of determined that governing is a shared responsibility between both parties in this congress laws can only pass with support from democrats and republicans and that means nobody gets a hundred percent of what they want everybody's got to get a little bit in a sensible way we move forward together or we don't move forward at all as we leave town for a few days to be with our families for the holidays no uh... it deserved by some perspective nobody can cool off erbakan pricks meg not awsome christmas cookies sim sink some uh... christmas carols enjoyed company of loved ones matt i'd ask every member of congress wilder back home to think about that think about the obligations we had to the people who sent us think about the hardship that so many americans will endure if congress does nothing at all just as our economy really starting to recover first argosy optimistic signs and we've seen actually some upside statistics from a whole range of areas including housing now's not the time for more self-inflicted wounds certainly not those coming from washington there's so much more work to be done in this country have jobs and on incomes education an energy were week away or the worst tragedies in memory so we've got work to do our gun safety host of other issues these are all challenges that we can meet well challenges the we have to me if we want our kids to grow up in america the sport opportunity possibility as much opportune involves bill is the america that our parents and our grandparents left for us who lived to be able to do it together we're gonna have to find some common ground and the challenge that we got right now is that the american people are a lot more sensible a lot more thoughtful and much more willing to compromise and give and sacrifice an act responsibly elected representatives that's a problem there's a mismatch right now between how her body else's thinking about these problems democrats at levels outside of this town and have folks are operating here and we just got a dead than alive we've only got ten days to do it so uh... i hope that every member of congress is thinking about that nobody can get on the person of what they want and this is not simply a contest between parties in terms of who looks good and who does the real world consequences to what we do here next year to be uh... year of strong economic growth i want next year to be year in which more jobs are created and more businesses are stark and were making progress on all the challenges that we have out there some of which by the way uh... we don't have as much control over as we have in terms of the shaping a sensible budget this is something within our capacity then take that much work we just have to do the right thing uh... call me a a hopeless optimist but actually still think we can get it done and with that along which every american the americas miss and because we didn't get this done i will see you next week right that afternoon everybody past couple months i've been working with leaders of both parties to try to forge an agreement who would grow our economy enshrine the deficit a balanced plan that would cut spending a responsible way but also ask the wealthiest americans to pay a little more and above all protect or middle class in everybody's striving to get into the middle class i still want to get this done it's the right thing to do for our families for businesses and for our entire economy the hour for immediate action is here it is now that were now the point where in just four days every americans tax rates are scheduled to go up by law every american's paycheck considerably smaller and that would be the wrong thing to do for our economy here would be bad for middle-class families and it would be bad for business is that the spam depend on family spend fortunately congress can prevent it from happening if they act right now i've just had a good and constructive discussion here at the white house with the senate and house leadership about how to prevent this tax like on middle class i'm optimistic we may still be able to reach agreement they can pass both houses in time senators read and mcconnell are working on such an agreement as we speak if an agreement isn't reached inside between sevareid and center mcaro then i will urge summary to bring that to before a basic package for an opportune boat one of the tax the middle class from income tax hike extends the vital lifeline of unemployment insurance to two million americans looking for a job and lays the groundwork for future cooperation are more economic growth and that's the reduction does i can hear you i believe such proposal could pass both houses with bipartisan majorities as long as those leaders allow it to actually come to a pulp if me members of the house or the senate one of old no but we should letter by boat that's the way this is close to work if you get a majority in the house and get 'em during the senate and which bill pass a bill so the american people are watching what we do here obviously their patients is already fed this is deja-vu all over again america wonders why it is that in this town for some reason you can't get stuff done in organized why everything always have to wait till last medical work now at the last minute in the american people are not going to have any patients for politically self-inflicted wound to work on not right now the economy is growing sustaining that friend is gonna require elected officials to do their jobs the housing market is recovering but that could be impacted if folks arcing smaller paychecks the unemployment rate is the lowest it's been since two thousand eight but already you're seeing businesses and consumers started a whole back because of the dysfunction that they see in washington economists business leaders all think that were poised to grow in two thousand thirteen as long as politics in washington don't get in a way of america's progress so we've got to get this done as one of our peak we had a constructive meeting today senators re and mcconnell are discussing a potential agreement where we get a bipartisan bill out of the senate over the house and done in a timely fashion so that we met the december thirty first deadline given how things have been working in this town we always have to wait and see until it actually happens the one thing the american eagle should not have to wait and see is some sort of action so if we don't see in agreement between the two leaders in the senate hi expect a bill to go on the floor and i'd ask center read into this put a bill on the floor that make sure that taxes on middle class families don't go up that unemployment insurance is still available for two million people and that lays the groundwork them for additional deficit-reduction an economic growth steps that we can take in the new year but let's not miss this deadline that's the bare minimum that we should be able to get done and shouldn't be that hard since democrats and republicans both say they don't want to see taxes go up on middle-class families uh... i decide to repeat outside of washington nobody understands how it is that this seems to be eight repeat pap over and over again ordinary folks they do their jobs they meet deadlines they sit down and they discussed things in them things happen if their disagreements they sort through the disagreements the notion that our elected leadership can do the same thing is mind boggling tool needs to stop so on modestly optimistic that it agreement can be achieved nobody's gonna get on a person what they want but let's make sure that middle class families in the american economy and in fact the world economy on adversely impacted because people can do their jobs thank you very much of it belief that they are sick well good afternoon everybody welcome to the white house now i realize last night what i hear is another speech for me uh... by it but i did need to talk about the progress that's being made in congress today for the last few days leaders of both parties but working toward an agreement that will prevent a middle-class tax hike from hitting ninety eight percent uh... all americans starting tomorrow preventing that acts like he has been my top priority because the last thing folks like folks up here on the stage can afford right now is to pay an extra two thousand dollars in taxes next year middle-class families can afford it businesses can't afford it our economy can afford now today's it appears that an agreement to prevent this new year's tax hike is within sight but it's not done there are still issues left to resolve but we're hopeful congress can get it done but it's not done and so part of the reason that i want to speak to all of your day is to make sure that we emphasize to congress members uh... of both parties understand that all across america this is a pressing concern on people's minds substantial agreement that's being talked about would not only make sure the taxes don't go up on middle class families it also uh... what extent tax credits for families with children he would extend our tuition tax credit that's helped millions of families for college would extend tax credits for clean energy companies that are creating jobs and reducing our depends on foreign oil it would extend unemployment insurance said two million americans who are out there still actively looking for job i have to say that uh... ever since i took office throughout the campaign and over the last couple of months my preference would have been to solve all these problems in the context of a larger agreement a bigger deal a grand bargain whatever you want to call it that solves our deficit problems in a balanced and responsible like the doesn't just deal with the taxes but deals with spending in a balanced way we can put all this behind us it is focusing on broaden our copy with this congress thought that was obviously all too much to hope for at this time it maybe we uh... can do it in stages we're gonna solve this problem instead in several steps last year in two thousand levin we started reducing the deficit through one trillion dollars in spending cuts those have already taken place agreement being worked on right now would further reduce the deficit by asking the wealthiest two percent of americans to pay higher taxes for the first time in two decades so that would add additional hundreds of billions dollars to deficit reduction so that's progress but we're going to be doable you keep in mind that just last month republican congress that they would never agree to raise tax rates on the wealthiest americans obviously the agreement is currently being discussed would raise those rates raise them permanently but but keep in mind borger still have more work to do we still have deficits that's be dealt with were still going to have to i think about how we put our economy on a long term project free of growth how we continue to make investments and things like education uh... things like infrastructure our colleague wrote and keep in mind that the threat of tax hikes going up is only one part of the so-called fiscal cliff that everybody's been talking about we also have facing us starting tomorrow are automatic spending cuts scheduled for that uh... and keep in mind that some of the spending cuts uh... the congress has said will automatically go to a fact uh... had an impact on our defense department but they also have an impact on things like head start and souther some programs that are scheduled to be cut that were using the annex instead of uh... may not always be the smartest cuts and so that a piece of business that still has to be taken care uh... alarm a clear anywhere but we have to deal where these automatic spending cuts they're being prepped for next month those also have to be balanced customer my principles always been let's do things the balance responsible way and that means the revenues had to be part of the equation in turning off the sequester in eliminating these automatic spending cuts as well as spending cuts now the same is true for any future deficit agreement obviously we're gonna have to do more reduce our dot and our deficit i'm willing to do more but it's gonna have to be about you'd have to do in the balance responsible way for example i'm willing to reduce our government's medicare bills by finding new ways to reduce the cost of health care in this country that something that we all should agree on we wanna make sure that medicare is there for future generations the crew trajectory of health care costs is gone up so high we've gotta find ways to make sure that it sustainable that kind of reform has to go hand-in-hand with doing some more work to reform our tax code so that wealthy individuals the biggest corporations can take advantage of loopholes and deductions that aren't available to most of the folks standing up here unavailable to most americans so there's still more work to be done in the tax code to make it fairer even as were also looking at how we could strengthen something like medicare if republicans think that i will finish the job of deficit reduction through spending cuts along and you hear that sometimes it's or after today we're just gonna only spending cuts shell spending for spending cuts addis that will hurt seniors or hurt students or hurt middle-class families without asking also equivalent sacrifice millionaires are companies with a lot lobbyists ever if they think that's going to be the formula for how we solve this thing uh... the neck of the other thing cup that's not how it's going we've got to do this in a balanced and responsible way and if we're going to be serious about deficit reduction and reduction it's going to have to be matter shared sacrifice leases on time for us and i'm them be present for much for your side how about are mostly a priority is to stop uh... taxes going up for middle-class families uh... starting tomorrow i think that is a modest gold that we can accomplish democrats and republicans in congress have to get this done but they're not there yet they are close but they're not there yet and one thing we can count on with respect to this congress is that uh... if there is even one second left before you have to do what you're supposed to do there were used at last night so of so expressed what it looks like a standards here n_b_c_ it's over your body yellow gumby hanging out and basically archive your house i don't wanna spoil the party but the uh... people were with me here today the people who are watching at home they need our leaders in congress to succeed they need us they need us allstate focus of politics not on a special interests they need be pocus on families students grandma's folks at work there work and really really hard uh... and are just looking for a fair shot uh... and some reward for that hard work expect our leaders to succeed on their behalf so do i and so keep the pressure on over the next uh... twelve hours or so let's see if we can get this thing done uh... and i thank you all i don't see it if i don't show up at your house how i wish everybody a happy new year thank you very much happy new year her body the central promise of my campaign for president was to change the tax code that was to skewed towards the wealthy at the expense of working middle-class americans we've done that thanks to the boats of democrats and republicans in congress i will sign a law that raises taxes on the wealthiest two percent of americans preventing a middle-class tax like they could have sent to the economy back in a recession obviously hata severe impact on families all across america i wanna thank all the leaders of the house and senate in particular i wanna thank uh... the work that was done by my extraordinary vice president joe biden as well ants leader harry reid speaker maynard nancy pelosi uh... and mitch mcconnell uh... everybody worked very *** this night appreciated and joe once again i want to thank you for your great work under this law more than ninety eight percent of americans and ninety seven percent of small businesses will not see their income taxes go up millions of families will continue to receive tax credits to help raise their kids and send them the culture companies will continue to receive tax credits for the research that they do investments they made and the clean energy jobs that they create and two million americans who are out of work out there looking pounding the pavement everyday we're gonna continue to receive unemployment benefits as long as they were actively looking for job i think we all recognize uh... this law is just one-step in the broader effort to strengthen our economy and broaden opportunity for everybody the fact is the deficit is still too hot we're still investing too little in the things that we need for the economy to grow as fast as it should and that's why speaker bainer neither originally tried to negotiate a larger agreement that would put this country on a path to paying down its debt while also putting americans back to work we build the roads and bridges and providing investments in areas like education and job training unfortunately their jaws was enough support four-time for that kind of large agreement in a lame duck session of congress and that failure comes with a cost as the messy may show the process over the past several weeks has made business more uncertain and consumers less confident but we are continuing to chip away at this problem step-by-step last year i signed into law one point seven trillion dollars in deficit reduction tonight's agreement further reduces the deficit by raising six hundred twenty billion dollars in revenue from the wealthiest households in america and there will be more deficit reduction as congress decides what to do about the automatic spending cuts that we have now too late for two months i wanna make this point as i've demonstrated throughout at the past several weeks i am very open to compromise i agree with democrats and republicans that the aging population and rising cost of health care makes medicare the biggest contributor to our deficit i believe we gotta find ways to reform that program without hurting seniors who count on it to survive and i believe it further unnecessary spending in government that we can eliminate we can't simply cut our way to prosperity cutting spending has to go hand-in-hand with further reforms for a tax cut so that wapis corporations and individuals can take advantage of loopholes and deductions that are available to most americans and we can't keep cutting things like basic research new technology and still expect to succeed in twenty first century economy we're going to have to continue to move forward in deficit reduction but we have to do in a balanced way making sure that we are growing even as we get a handle uh... on are spending now one last point one make while i will negotiate over many things i will not have another debate with this congress over whether or not they should pay the bills that neighbouring racked up through the walls that they passed let me repeat we can't not paid bills that we've already incur if congress refuses to give the united states government the ability to pay these bills on time the consequences for the entire global economy would be catastrophic far worse than the impact of a fiscal plan people remember back in two thousand one last time this course of action was threatened for entire workup kary was put at risk consumer confidence plunged business investment plunge we can go down that path today is agreement enshrines i think a principle in the wall the warm remain in place as long as i am present the deficit needs to be reduced in a way that spells everyone pays their fair share everyone does their part that's our company works best that's how we grow the sum total of all the budget agreements we've reached so far proves that there is eight passport that it is possible if we focus not on our politics but what's but on what's right for the country and the one thing that i think hopefully in the new york focus on seeing if we can put a package like this together with a little bit less drama a little less brinksmanship uh... not scare the heck out of folks quite as much we can come together as democrats and republicans to cut spending and raise revenue away the reduce our deficit protects our middle class provides letters in the middle class for a buddy whose won't work or we can find a way that before the investments that we need to grow and compete we can settle this debate or the very least not allowed to be so all-consuming all the time that stops us from eating a host of other challenges that we face creating jobs boosting incomes fixing our infrastructure fixing our immigration system protecting our planet from the harmful effects of climate change boosting domestic energy production protecting our kids from the horrors of guidelines it's not just possible to do these things its nomination to ourselves and a future generations and i look forward to working with every single member of congress to meet this obligation in the new year and i hope that everybody nuggets at least ah... a day off i guess a few days off uh... so that uh... people flush themselves because we're gonna have a lot of work to do in twenty thirty thank survived cafeteria albright these national economic council we just completed a major fiscal deal in washington and so all i walk you through what was in that deal i forgot what and what it means for our economy so the deal that the president just signed makes major progress in all four these areas let's start with taxes for the middle class without this deal taxes were scheduled to go up by about twenty two hundred dollars for the typical middle class family because of this deal that's not going to happen instead we are going to make permanent lower rates for middle-class families in addition this deal continues important tax credits for working families called the earned income tax credit in the child tax credit he's put money in the pockets of families that need it the most and help our economy as well and finally this deal fixes something that's called the alternative minimum tax which has been playing our tax code for decades it's complex and threatened to hit lots middle-class families for the first time in more than twenty years we've democrats and republicans coming together to vote for a bipartisan tax increase that will help offs pay for the things we need and movie accounted for has a couple of components first is that for the wealthiest americans the top tax rate that they pay is going to return to where it was during the clinton ministration second the rates on campus capital gains and dividend income are going to go up as well and when you combine what happened with this deal with the capital gains a dividend rate increases that were in the affordable care act the health care reform bill going forward people making over two hundred fifty thousand will pay about a nineteen percent on their capital gains in dividend income and people making over four hundred fifty thousand pay about twenty four percent third the tax benefits that the wealthiest americans receive in in the form of deductions and exemptions will be slowly reduced starting at two hundred fifty thousand and four th the tax rate that the wealthiest the states the largest two states in this country pay will increase from thirty five percent to forty percent if you step back and you look at these two pieces together making that tax code permanently promo class inning sure that the wealthy pay a little bit more back to what they were playing in the clinton ministration what this deal does this makes the tax code as progressive as it has been in decades now third this was a deal about taxes but is about more than that as well it gives companies strong incentive to make the investments that they need to create jobs next year by both extending uh... tax credits like target tax credit and allowing companies to write off half of any new capital expenses that they make next year this studio extends a critically important tax credit called the production tax credit which provides renewable power companies an incentive to make the investments they need to grow this deal extends a tax credit that we call the american opportunity tax credit for what it does is it gives every person who's trying to go to college a the potential to receive eight twenty five hundred dollar tax credit if they're eligible to i help defray the cost of college and finally this deal extends unemployment insurance for a full year so that those people who are out there work because looking every day to find a job in economy it is still very tough have those benefits in their pocket and that our economy benefits from the spending that those unemployment benefits generate and finally the president focus for a long time now on reducing our deficit which is the difference between the amount that we spend an amount that we're taking in in tax revenue in a balance responsible way without this deal the wealthy were paying lower taxes now with this deal in place they're going up a little bit more and that additional amount helps contribute to reducing the deficit in the future and when you take into account all of the provisions that we talked about here it's not a it's not true real amount of money in fact if you based on estimates that the congressional budget office isme and that's the official score keeper for these types of things here in washington based on their numbers this deal will reduce the deficit by about seven hundred and forty billion dollars over the next ten years and this seven hundred and forty billion dollars is important because a calms on pt hot of the deficit-reduction efforts regarding me and last year uh... through the budget control act and prior spending bills this president has already signed into law one point seven trillion dollars in spending reductions we are building the foundation for the kind of bounced efforts of production that we need now the president said he wants to do more he believes we need to do more but the important thing that he has made clear for this deal and he's going to focus on going forward is that that's reduction needs to be balanced any additional spending cuts need to be coupled with additional revenue increases because that's the right way to do deficit reduction that so we shown in the context of the steel so that's basically what came out of the fiscal cliff i know it can be very confusing there's a lot of back-and-forth but at the end of the day important things to remember this middle class tax families we're going to c continued lower tax rates because of the steel the wealthiest americans are going to go back to paying about the same amount of taxes that they pay during the clinton ministration were to do a couple really important things to keep our economy growing and help clean energy manufacturing in villa support desperately looking for work uh... here in america and finally we've made another important contribution to reducing our deficit in the balanced way we've got a lot more to do but this is a very important step for our connie for middle-class families