Obama addresses fiscal cliff in first post-election speech - FOX 35 News Orlando

President Obama: 'We can’t just cut our way to prosperity'

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  • What is the fiscal cliff?

    What is the fiscal cliff?

    Thursday, November 8 2012 10:52 PM EST2012-11-09 03:52:33 GMT
    So just what is this "fiscal cliff" that has the financial markets rattled and economists and policymakers alike in a tizzy over the potential for sending the economy into another tailspin?
    So just what is this "fiscal cliff" that has the financial markets rattled and economists and policymakers alike in a tizzy over the potential for sending the economy into another tailspin?
(KMSP) -

As we head closer and closer to the so-called fiscal cliff, President Obama says "it's time to get back to work, and there's plenty of work to do."

The Congressional Budget Office warns that if the combination of tax hikes and spending cuts hits at the end of the year, the economy won't just slow down -- it will actually start to shrink. So the president is putting pressure on Congress to reach an agreement on a deficit reduction plan by the end of the year, or else Americans will feel the true gravity of the fiscal cliff.

"Right now, if Congress fails to come to an agreement on an overall deficit reduction package by the end of the year, everybody's taxes will go up at the beginning of the year," Obama said, making his first post-election remarks. "That makes no sense. It would be bad for the economy and hit families already struggling to make ends meet."

Reaching an agreement will come down to two men: President Obama and Republican House Speaker John Boehner.

The president said Friday he has invited leaders of both parties to the White House next week "so we can start to build consensus around the challenges we can only solve together."

As expected, the president insists raising taxes on the wealthiest Americans is essential to balancing cuts with revenue.

"We can't just cut our way to prosperity," Obama said. "And that means asking the wealthiest Americans to pay a little more in taxes."

Boehner, while now open to raising taxes in other ways, told ABC news that tax rates should remain where they are.

"I made clear yesterday that raising tax rates is unacceptable," Boehner said. "And frankly, it couldn't even pass the House. Putting increased revenues on the table but through reforming our tax code. And I would do that if the president were serious about solving our spending problem and trying to secure our entitlement programs."

Most economists agree that reforming entitlement problems like Medicare, Medicaid and Social Security is necessary, but it would involve a grand bargain that could take months or years to get done.

The deadline for Congress is just over seven weeks from now.

And the problem facing a grand bargain? One interest group after another will line up to oppose it.

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