IOWA CITY, Iowa - In his first speech since re-election, President Obama warned all Americans of a tax increase. He told the country he is inviting Congressional leaders from both parties to the White House next week for talks on how the government can avoid a "fiscal cliff."
The end of the Bush tax cuts mixed with a series of federal spending cuts, slated for January 1, would likely lead to another recession, econonmists say. That means lawmakers have until January 2 to reach an agreement, or the country may face severe, automatic tax increases and budget cuts.
"If they actually let it happen, bad things are going to happen," said Dr. John Solow, UI economics professor. "No one in congress wants to be blamed for bad things that happen."
Both the president and speaker of the house spoke publically about the issue on Friday. While both sides appear to be open to compromise, President Obama said those making over $250,000 annually will see a tax increase.
In Iowa, only 2.4% of the population earns more than $200,000 a year, according to the census bureau. There is no data available on what percentage makes $250,000 or more.
"I'm tired of the gridlock, I'm tired of the country the way it is, it's pretty devastating right now that we can't figure this out," said Loxley Eckles, of North Liberty. Eckles said he watched President Obama's address on Friday and felt it was very political in nature.
Eckles said he's optimistic for the future mostly through prayer. "Thank goodness for that," he said.