News Column

Obama Visits Toy Manufacturer to Tout Fiscal Cliff Solution

Nov 30, 2012

Scott Kraus, The Morning Call (Allentown, Pa.)


President Barack Obama will make his first post-election public appearance outside the nation's capital at noon today at a Hatfield, Montgomery County plastic manufacturer, to put pressure on Congressional Republicans to make a deal on the looming fiscal cliff.

Obama will tour Rodon Group, a sister company of K'Nex, which employs about 150 people making plastic parts for toys and other consumer products.

The visit has drawn 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.

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.

Income tax rates have been a major sticking point. Democrats have proposed extending tax cuts implemented under President George W. 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 and Allentown School Board member Ce Ce Gerlach are among those who are scheduled to meet Obama after the event.

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

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