News Column

Obama Urges Republicans Not to Play Scrooge on Middle Class Taxes

Nov 30, 2012

Scott Kraus

Middle Class Taxes

President Barack Obama took his plan to avoid the looming fiscal cliff to a Hatfield, Montgomery County toy manufacturer Friday, a move designed to put public pressure on congressional Republicans to make a deal on middle class taxes.

Against a background of K'Nex building sets made at the factory, Obama said Republicans would be playing the role of one of literature's most notorious Christmas villains if they fail to extend Bush-era tax cuts for families earning less than $250,000 by a Jan. 1 deadline.

"That's a Scrooge Christmas," Obama said, to laughs.

Extending the tax cuts for those taxpayers would buy time for both parties to work out a deal to reduce the deficit in the long run, he said, speaking to a crowd of about 200 people about 45 minutes south of Allentown off Route 309.

"Where the clock is really ticking right now is on middle class taxes," Obama told about 200 people.

Before his remarks, Obama toured the Rodon Group facility, a sister company of K'Nex, which employs about 150 people making plastic parts for toys such a Lincoln Logs and Tinkertoys and other consumer products with chairman and K'Nex co-inventor Joel Glickman, Vice chairman and General Counsel Robert Glickman, and CEO Michael Araten.

At the close of the tour, he stopped by an injection molding machine that makes the flexible chains for the K'Nex roller coaster set. POTUS seemed intrigued by the complex, bright orange coaster that had been assembled for his inspection beside the machine. "This is spectacular here," he said.

The visit drew criticism from Republicans, who have said the president's time would be better spent negotiating a deficit-reduction deal to avoid the combination of tax increases and automatic spending cuts that will kick in January, threatening to undermine the U.S. economy.

Down the road from the factory a group of two dozen tea party and patriot group protesters hoisted signs and cheered when they saw Obama's helicopter leave the area.

Obama's proposal would hurt small businesses that make over $250,000 whose taxes are paid by their owners, said Jaime Faucette, president of Citizens for Constitutional Government and a Bucks County Republican committee woman.

"That is just saying we are going to allow those taxes to go up for the job creators," she said.

Economists warn that the combination of increased taxes and cuts to federal spending would result in a decline in consumer spending that would hurt companies like Rodon, which depend on consumer demand for their products.

The administration on Thursday made a proposal that included $1.6 trillion in higher taxes over the next decade and short-term spending to help the unemployed and struggling homeowners, coupled with a promise to pass legislation aimed at finding $400 in spending cuts to Medicare and other federal benefits.

House Republicans were not impressed, saying little progress was made in the meeting they had with Treasury Secretary Timothy Geithner in which the administration detailed its plan. Analysts see the proposal as an opening bid in talks that could go down to the wire.

House Speaker John Boehner, speaking in Washington after Obama finished in Pennsylvania, said the president's proposal was not serious, but said he is willing to move forward in good faith.

Income tax rates have been a major sticking point. Democrats have proposed extending tax cuts implemented under Bush for all but the wealthiest taxpayers. Republicans have said the cuts should be extended for everyone, saying small businesses whose profits are reported as income by their owners would be hurt by letting the rates expire on top earners.

If no deal is made, income tax rates for all taxpayers will increase, Social Security withholding tax would rise from 4.2 percent to 6.2 percent of workers' paychecks and the federal government would be required to make significant across-the board spending cuts under a debt-ceiling deal made in Aug. 2011.

Two Lehigh Valley students Isaiah Zukowski, a student at Emmaus High School, and Beth Rader, a student at Muhlenberg College in Allentown who volunteered for Obama during the 2012 campaign got to meet Obama after the event.



Source: (c)2012 The Morning Call (Allentown, Pa.). Distributed by MCT Information Services.