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Obama outlines 'fiscal cliff' plans

US President Barack Obama has said his re-election means Americans support his approach for avoiding a looming "fiscal cliff" that threatens a new recession - and that his approach means the country's wealthiest people will have to pay more in taxes.

A White House spokesman later said Mr Obama will veto any Bill extending tax cuts for those making more than 250,000 dollars (£156,000) a year.

Mr Obama's brief public comments were his first since his re-election, and they set the tone for upcoming tense talks with congressional Republicans on avoiding a combination of deep spending cuts and the expiration of Bush-era tax cuts that automatically take effect January 1, and total 800 billion dollars (£500 million) next year alone.

Republicans want fiscal cliff avoidance tactics to rely on spending cuts, but Mr Obama insists that higher taxes for the wealthy must be part of the solution. "We can't just cut our way to prosperity," the president said.

Mr Obama reminded his audience that if no deal is struck with a still-divided Congress, "everybody's taxes will automatically go up on January 1. Everybody's... That makes no sense. That would be bad for the economy".

He also invited Congressional leaders of both parties to the White House next week for talks on how to avoid the fiscal cliff.

Mr Obama had been silent since his victory speech on Wednesday, and leading Republicans have filled the vacuum with promises to stand resolutely against any effort to raise tax rates on the country's richest people.

The president's long-held position is that tax rates on family income over 250,000 dollars should jump back up to Clinton-era levels.

All sides say they want a deal, and that now the election is over everyone can show more flexibility than in the heat of the campaign. Congress returns to work on Tuesday and faces about a month and a half of work before the holidays.

But Republicans warn that a fight could hurt efforts for future compromise in a bitterly divided Capitol and threaten Mr Obama's second-term agenda.


From Belfast Telegraph