The Looming Tax Battle

Tuesday, September 20, 2011 - 2:56pm

Republicans balk at President Obama's plan to cut the deficit by raising taxes on millionaires.

President Obama hopes he has Washington, and voters nationwide, seeing him in a new way: as a fighter.

After a summer of compromise, the president's posture has changed and he's ready for a fight over the spending cuts and taxes.

The Obama deficit plan would cut Medicare spending by hiking premiums, co-pays and deductibles after 2017, but only if Republicans agree to tax the rich more.

Today they did not.

"He has chosen what I think is election year politics over what's good for the economy," said South Dakota Senator John Thune.

The President demanded Congress hurry, but both sides are preparing to fight through 2012.

"If somebody buckles before then, or if both sides decide it's in their interest to make a deal they will, but it's not looking likely," says CNBC political analyst John Harwood.

By Thanksgiving the Congressional "Super Committee" is supposed to have a compromise plan on debt, spending and jobs, but the two sides are so far apart on taxes it's not clear if they can agree, and not clear if Congress would pass what they recommend.

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