Labor Heads: President Obama Backs Them on 'Fiscal Cliff' - KTVN Channel 2 - Reno Tahoe News Weather, Video -

Labor Heads: President Obama Backs Them on 'Fiscal Cliff'

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Labor leaders say President Barack Obama remains committed to preserving tax cuts for middle class families and ensuring that the wealthiest Americans pay more in taxes.

The leaders of labor unions met with Obama Tuesday to discuss ways of averting the so-called "fiscal cliff" and find consensus on a plan to prevent more financial hardships next year.

AFL-CIO President Richard Trumka says Obama expressed his commitment to ensuring that the wealthy pay their fair share in taxes. He says labor leaders made clear their opposition to benefit cuts to Medicare as part of any plan to deal with the fiscal cliff.

Labor and progressive leaders say they plan to make a public campaign during the lame duck session to pressure Republicans to support higher taxes for the wealthy.

Obama and bipartisan congressional leaders will hold their first fiscal cliff meeting Friday.

It's a one-two punch of expiring Bush-era tax cuts and major across-the-board spending cuts to the Pentagon and domestic programs that could total $800 billion next year, based on Congressional Budget Office estimates.

The cliff is the punishment for previous failures of a bitterly-divided Congress and White House to deal with the government's spiraling debt or overhaul its unwieldy tax code.

The largest component of the cliff comes with the expiration of tax cuts enacted in 2001 and 2003 and extended two years ago in the wake of President Barack Obama's drubbing in the 2010 midterm elections.

It also includes sharp spending cuts imposed as a consequence of the failure of last year's deficit-reduction supercommittee" to reach agreement. There are other elements, chiefly a 2 percentage point cut in payroll taxes orchestrated by Obama and unemployment benefits for the long-term jobless that would disappear.

Specifically, the fiscal cliff includes:

-The expiration of Bush-era tax cuts on income, investments, married couples and families with children and inheritances.

-A $55 billion, 9 percent cut in defense spending next year and another $55 billion in cuts to domestic programs, including a 2% cut to Medicare providers.

-The expiration of unemployment benefits for the long-term jobless and a sharp cut in reimbursements for doctors participating in Medicare.

-The expiration of Obama's temporary 2 percentage point cut in payroll taxes.

-The imposition of the alternative minimum tax on some 26 million households, which would raise their taxes by an average of $3,700.

-A variety of smaller taxes cuts for both businesses and individuals collectively known as tax "extenders" in Washington-speak. They include a tax credit for research and development and a deduction for sales taxes in states that don't have an income tax.

On Tuesday, Senator Harry Reid commented on the cuurent situation:

If there is a message to take away from this year's election, it is this: Americans are tired of the politics of division.

They are tired of obstruction and distraction.

The American people -- Democrats and Republicans -- want cooperation and conciliation.

I urge any of my Republican colleagues who are considering the same strategy of obstruction to turn away from the divisions of the past and join in cooperation, compromise and consensus.

Gridlock is not the solution -- it is the problem.

----

How this Congress deals with the challenges ahead will be a test of our character, both as individuals and as a political body -- the United States Senate.

We could avert the fiscal cliff for 98% of American families and 97% of small businesses today. The House must only consider the Senate-passed bill freezing tax rates for those making less than $250,000 a year.

This Congress is but one vote away from avoiding the fiscal cliff for middle class families and small businesses.

(The Associated Press also contributed to this report.)

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