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Last updated: February 19. 2013 8:36PM - 175 Views

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WASHINGTON — President Barack Obama said Tuesday avoiding an economic plunge over the fiscal cliff comes down to Republicans' realizing that tax rates must go up on wealthiest Americans. We're not going to be able to get a deal without it, he said.


The president said he would consider lowering rates for the top 2 percent of earners next year as part of a broader tax overhaul effort that closes loopholes, limits deductions and finds other sources of revenue.


It's possible that we may be able to lower rates by broadening the base at that point, Obama said in an interview with Bloomberg Television Tuesday.


The remarks, which reiterated a position that White House officials have expressed privately, is designed to give Republicans an opportunity to lower rates for the rich, but only after they rise at year's end when Bush-era tax cuts expire.


Later, however, White House spokesman Jay Carney left open the possibility that the rate would not have to rise to 39.6 percent, the rate in place during the administration of President Bill Clinton.


Obama's remarks came a day after Republicans proposed a fiscal cliff plan that revives ideas from failed budget talks with Obama last year, calling for raising the eligibility age for Medicare, lowering cost-of-living hikes for Social Security benefits and bringing in $800 billion in higher tax revenue.


The 10-year, $2.2 trillion proposal from House Speaker John Boehner, R-Ohio, resembles a framework similar to what Boehner supported last year, but Obama is pressing for additional tax increases and appears to be balking at spending cuts discussed in those talks and since.


Administration officials from Obama on down say it'll take money from raising tax rates on the rich — instead of GOP proposals to simply curb their deductions — to win Obama's approval of any plan to avoid the fiscal cliff.


It has been nearly a week since Obama and Boehner talked directly about the looming cliff, though their staffs have been in contact. Boehner attended a congressional holiday party at the White House Monday night, but avoided the photo line where members get their picture taken with the president and have a few minutes to talk.


Obama met with a bipartisan group of governors, who sought assurances that any cuts in spending as part of an agreement on the fiscal cliff wouldn't shift the burden onto states. The governors said they wanted flexibility from the federal government on certain mandated programs like Medicaid to allow them to do more with less.


We asked for flexibility on how the federal money is passed down to the states and the cuts that are passed down, that we could have some flexibility to do what's in the best interest of our states, said Oklahoma Gov. Mary Fallin, a Republican.


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