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WASHINGTON

Obama calls Boehner offer 'out of balance'

David Jackson, USA TODAY
President Obama, flanked by National Governors Association Chairman  Jack Martell, D-Del., and NGA Vice Chairwoman Mary Fallin, R-Okla.
  • The president rejects the latest Republican 'fiscal cliff' plan
  • Obama met with 3 Democratic, 3 Republican governors
  • White House, Republican leaders at odds over higher taxes on the wealthy

President Obama said Tuesday the latest Republican "fiscal cliff" plan is "still out of balance" because it does not include higher tax rates on the wealthy.

"We have the potential of getting a deal done," Obama said during an interview with Bloomberg Television, but it must be a "balanced" debt reduction plan that includes both budget cuts and higher tax rates on Americans who make more than $250,000.

The president said he does not expect to get "100%" of what he wants in any agreement, but noted he ran for re-election -- and won -- on a pledge to eliminate the George W. Bush-era tax cuts for high-end earners.

Seeking to build political support for his plan, Obama met at the White House on Tuesday with a delegation of six governors, three from each party.

House Speaker John Boehner, R-Ohio, and other Republicans say raising tax rates would kill jobs and slow the economy. They have put up a plan that relies on closing tax loopholes and ending certain deductions instead, saying that will bring in $800 billion in higher tax revenues.

The GOP's 10-year, $2.2 trillion debt reduction plan also calls for raising the eligibility age for Medicare and lowering cost-of-living hikes for Social Security benefits.

The parties are seeking to avoid the so-called "fiscal cliff," a series of tax hikes and budget cuts that kick in automatically if the White House and Congress are unable to reach a budget agreement.

"If the President really wants to avoid sending the economy over the fiscal cliff, he has done nothing to demonstrate it," Boehner said. "Instead, he has offered a plan that could not pass either house of Congress -- not the House of Representatives and not the Democratic-controlled Senate."

Both Republicans and Democrats say falling off the fiscal cliff would plunge the nation back into recession.

"America is poised to take off," Obama told Bloomberg. "The question is, let's make sure that we don't have a self-inflicted wound."

Obama did appear to be offering some negotiating room during the interview. He declined to say specifically whether the top tax rate has to go all the way back up to 39.6%, its level before the Bush tax cut package. The president also offered to work with Republicans on overall tax reform in 2013, and "it's possible that we may be able to lower rates by broadening the base at that point."

The governors who met with Obama, representing the National Governors Association, said they didn't want to endorse one plan or the other. "We agree that something should be done," said Gov. Jack Markell, D-Del., chairman of the NGA, after the meeting.

Like his statehouse colleagues, Markell expressed concern about the economic uncertainty surrounding the possibility of the fiscal cliff.

The president's guests included Republican Gov. Scott Walker of Wisconsin, whose battles with public employee unions made headlines throughout the recent election season.

Walker -- who also reported that "our focus was not on endorsing a specific plan" -- said the group wanted to make sure that the nation's governors got "a seat at the table" as the White House and Congress worked through budget issues.

White House officials said higher taxes on the rich are part of a "balanced" plan that also includes budget cuts as a way to reduce the national debt that now tops $16 trillion.

During the Bloomberg interview, Obama said Boehner's plan to rely on closing loopholes and ending deductions would raise no more than $300 billion or $400 billion, much less than the $800 billion projected by the GOP. In order to raise that kind of money, Obama said, officials would have to consider the elimination of popular tax breaks, such as the one on charitable contributions.

Even some Republicans are criticizing the Boehner plan, saying they oppose any type of tax hikes. "Speaker Boehner's $800 billion tax hike will destroy American jobs and allow politicians in Washington to spend even more," said Sen. Jim DeMint, R-S.C.

The other governors who met with Obama were Gov. Mary Fallin, R-Okla, the vice chair of the NGA; Gov. Mike Beebe, D-Ark.; Gov. Mark Dayton, D-Minn.; and Gov. Gary Herbert, R-Utah.

The group also had scheduled separate meetings with Boehner and Senate Majority Leader Harry Reid, D-Nev.

Treasury Secretary Timothy Geithner -- Obama's key negotiator on Capitol Hill -- briefed the governors about the administration's proposals to avoid cliff.

Obama and aides said little about legislative strategy on a final deal, the governors reported. The president "did not handicap it one way or another," said Markell.

The governors' meeting is Obama's latest effort to build support for his negotiating position on the fiscal cliff. Since Thanksgiving, the president has met with with labor leaders and business CEOs as well as congressional leaders.

Obama is also seeking support through media. In addition to the Bloomberg interview, the president on Monday conducted a Twitter chat with followers about the fiscal cliff.

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