Back on stump, Obama urges GOP action

President Obama said Friday that if Congress did not extend tax cuts for the middle class by Jan. 1, it would be like receiving a “lump of coal” for the holiday season.

“That's a Scrooge Christmas,” Obama said in brief remarks at a Pennsylvania toy factory.

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The visit to the manufacturer of Tinkertoys and K’NEX building sets represents an effort by Obama to exert public pressure on Republicans in Congress to agree to an extension of middle class tax rates that would allow rates on the wealthy to rise.

Republican leaders have criticized Obama for the move, arguing the campaign has ended and that Obama should be negotiating with them in Washington. But the White House believes the public campaign will turn up the pressure on Republicans to offer concessions.

Obama made the trip a day after Republicans rejected a White House offer that would raise $1.6 trillion in new taxes and cut spending by $400 billion. The proposal also called for a permanent extension to the debt ceiling.

The offer presented by Treasury Secretary Tim Geithner included few if any concessions to Republicans, and Speaker John Boehner (R-Ohio) on Friday said talks are deadlocked.

“There’s a stalemate. Let’s not kid ourselves,” Boehner said at a quickly-scheduled Capitol news conference to respond to Obama's speech. “Right now, we’re almost nowhere.” 

If Congress takes no action before the end of the year, all of the Bush-era tax rates will expire and $1.2 trillion in spending cuts to defense and non-defense budgets will begin to be implemented. Economists warn the combination could lead to a new recession.

Obama made clear during his visit that he would not accept any deal with Congress that did not ask the wealthiest Americans to pay higher tax rates. For the second time this week, Obama maintained that the Republican-led House should follow the Senate's lead and pass legislation so that 98 percent of Americans wouldn’t see a hike in their taxes by year's end.

“This is not some run-of-the-mill debate,” he said. “We've got important decisions to make that are going to have a real impact...If Congress does nothing, every family in America will see their taxes go up on Jan. 1,” Obama said.

“I want the American people to urge Congress, soon,” he added, asking those who might be impacted to e-mail Capitol Hill, write on Twitter, and even post on their lawmaker's Facebook walls. “The key there is that the American people have to be involved. We all know you can't take anything for granted when it comes to Washington.”

Obama said he is “hopeful” that a deal can be done, and acknowledged that there is some movement in the debate: “We are starting to see a few Republicans come around in Congress.”

But, standing in the toy factory, surrounded by boxes, Obama quipped that he's been keeping his own "naughty and nice list for Washington. He joked that there will be some members who get toys from the factory and "some who don't."

In a gaggle with reporters on Friday, White House Principal Deputy Press Secretary Josh Earnest told reporters that the White House proposal offered to House and Senate Republicans should have come as no surprise.

"I was surprised that they were surprised," Earnest told reporters as Obama traveled to Pennsylvania for the event.

Earnest would not say if the White House is planning to release a copy of the Geithner proposal, but he added, 'There was nothing included in those discussions that would surprise you. ... There is no reason for anybody to be surprised."

Asked about entitlements as part of the package, the White House spokesman said the proposal included $100 billion in savings from Medicare prescriptions drug purchases and by asking wealthy seniors to pay more.