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The fiscal cliff agreement will accomplish deficit reduction through a combination of spending cuts and increased revenue

The President kept his promise to raise tax rates on millionaires and billionaires and prevented a middle-class tax hike that could’ve sent the economy back into recession. This bipartisan deal is the first time in two decades that rates have been raised on the wealthiest Americans.

This agreement sets a precedent that will remain in place as long as the President in office: deficit reduction must be achieved in a balanced way. Everyone must pay their fair share because that’s how our economy works best.

Under this bipartisan deal:

  • 98% of Americans and 97% of small business will not see their income taxes go up.
  • Tax rates will increase to the level they were at under President Clinton--39.6%-- for the wealthiest Americans making over $400,000 a year . Under those rates, our economy created over 23 million new jobs. These rate increases will be immediate and permanent. Tax benefits for people making over $250,000 will be reduced.
  • Middle class families will continue to receive tax credits to help raise their children and afford a college education.
  • Tax credits will continue for companies to encourage the research they do, the investments they make, and the clean energy jobs they create.
  • Temporarily prevents automatic spending cuts that would threaten our national security and slash investments that build our economy and the middle class.
  • Two million Americans who lost their job through no fault of their own will continue to receive unemployment benefits so long as they are actively looking for a job.

This agreement is one step in broader effort to strengthen our economy. The deficit is too high and we are not investing enough in the things that will continue to grow our economy.

The President’s position has been clear throughout: reduce the deficit in a balanced way with a $4 trillion agreement. That sort of agreement wasn’t possible with this Congress. President Obama will continue to address this problem in a step-by-step approach. President Obama has already signed into law more than $1 trillion of spending cuts. The bipartisan deal reached yesterday raises $620 billion from millionaires and billionaires and cuts the deficit by $737 billion over the next ten years. It is one of the largest deficit reduction bills passed in the last 15 years. There will be more deficit reduction to come and it will be achieved through a balance of spending cuts and more revenue from the wealthiest Americans.

The President is willing to negotiate to achieve balanced deficit reduction. He is not willing to debate with the Congress over whether they should pay the bills they have already racked up. If Congress refuses to give the United States government the ability to pay these bills on time, it could affect the entire global economy. The last time they tried that, our economic recovery was threatened. The consequences of Congressional brinksmanship could be far worse than the fiscal cliff.

It is critical that we reduce our deficit. We cannot keep racking up debt. As we move to address these challenges, the President will continue to fight everyday on behalf of middle class Americans.

We must continue to do all that we can to strengthen our economy and create jobs. We need to build our economy from the middle out, not the top down. In order to do that, we need to reduce our deficit without sacrificing key investments in manufacturing, clean energy, education, and small business. The President is committed to tackling some of the biggest challenges that we face in his second term including: jobs and boosting incomes; fixing our infrastructure and our immigration system; protecting our planet from the harmful effects of climate change, and protecting our children from the horrors of gun violence.