* Obama won't budge on tax rate increase for wealthiest
* President suggests 2013 tax reform could yield lower rates
* Republican DeMint says Boehner offer will "destroy jobs"
* Tea Party conservatives booted from House panel
By David Lawder and Thomas Ferraro
WASHINGTON, Dec 4 President Barack Obama held
his ground on the "fiscal cliff" on Tuesday, insisting on higher
tax rates for the wealthiest Americans, while Republicans showed
increasing disarray over how far they should go to compromise
with Obama's demands.
With less than a month left to confront the budget cuts and
tax increases that will begin taking effect in January unless
Congress acts, Obama dangled the possibility of lowering tax
rates as part of a broad U.S. tax code revamp in 2013.
But he again insisted, in an interview with Bloomberg
Television, that tax rates for the wealthiest 2 percent of
taxpayers must rise in any deal by the end of the year to avert
the assorted measures known as the fiscal cliff.
Obama, a Democrat, may face resistance from his own party if
and when he's forced to be specific about how he would cut the
cost of entitlements, such as the Medicare health insurance
program for seniors.
For the moment, however, the overall political picture
Tuesday reflected a relatively solid front of Democrats versus
an increasingly shaky group of Republicans.
Mitch McConnell, the Republican minority leader in the
Senate, even avoided endorsing the negotiating position of his
House of Representatives ally, Speaker John Boehner.
"I think it is important that the House Republican
leadership has tried to move the process forward," McConnell
told reporters trying to get his views on a proposal Boehner and
the House Republican leadership sent to Obama on Monday.
Outside the capital, concern mounted about how and when -
not to mention if - the politicians might put their
disagreements behind them and deal conclusively with an issue
that economists say could trigger another recession.
Corporate chief executives were scheduled to meet with Obama
later on Wednesday. The Business Roundtable, a lobbying group
for corporations, has arranged the meetings. In addition to
prompt action on the fiscal cliff, the group is seeking tax cuts
for their companies.
Boeing Co. CEO Jim McNerney, who chairs the group,
said its members want "a balanced solution to the nation's
fiscal cliff and long-term deficit and debt issues ... including
meaningful and comprehensive tax and entitlement reforms."
The manufacturing sector contracted in November and posted
its weakest performance in three years, a report showed on
Monday. Companies taking part in the survey said uncertainty
over the negotiations in Washington was a factor.
U.S. stocks slipped on Tuesday as investors fretted about
Washington's ability to avoid a year-end budget crisis.
On Capitol Hill, conservative South Carolina Senator Jim
DeMint attacked Boehner, a fellow Republican, over Monday's
fiscal cliff offer, which included $800 billion in revenue
increases from overhauling the tax code, along with spending
cuts and entitlement revisions, as part of a deficit reduction
That amount, which Boehner informally accepted during
previous debt-ceiling negotiations in 2011, was not enough to
satisfy Obama. But it was too much for DeMint and other
Republicans who have made opposition to tax increases of any
kind a central part of their politics for many years.
"Speaker Boehner's $800 billion tax hike will destroy
American jobs and allow politicians in Washington to spend even
more," DeMint said in a statement on Tuesday.
Signaling some worry about fragmented sentiment in the
House, Republican leaders took the unusual step of removing two
hard-line Tea Party conservatives, Tim Huelskamp of Kansas and
Justin Amash of Michigan, from the House Budget Committee, where
elements of a fiscal cliff deal are likely to be considered.
A few House Republicans, such as Mike Simpson of Idaho and
Steve King of Iowa, have said tax increases on the wealthiest
may be tolerable under certain conditions.
OBAMA PRESSES ADVANTAGE
The president pressed his agenda on Tuesday, reiterating his
openness to unspecified reforms in entitlement programs.
He repeated that as part of any deal, low tax rates on 98
percent of taxpayers should be extended, but that taxes on the
top 2 percent should rise. "Let's let those go up," Obama said,
referring to a "down payment" for future negotiations.
"And then let's set up a process with a time certain, at the
end of 2013 or the fall of 2013, where we work on tax reform, we
look at what loopholes and deductions both Democrats and
Republicans are willing to close, and it's possible that we may
be able to lower rates by broadening the base at that point."
Fueling concerns among some Republicans about resisting
compromise are surveys, like one released by the Pew Research
Center on Tuesday, which showed that about 53 percent of those
polled said they would hold Republicans more responsible than
Democrats for going over the cliff; 27 percent said they would
hold Obama responsible.