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GOP disses Obama's 2012 budget

By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney.com) -- House Republicans hammered President Obama's 2012 proposed budget on Tuesday, telling Treasury Secretary Tim Geithner that tax increases included in the plan are unacceptable.

"Because they kill jobs, those tax increases are dead on arrival in this House," Rep. Kevin Brady of Texas told Geithner, who was testifying before the Ways and Means Committee.

President Obama, in defending his budget proposal earlier in the day, vowed that his proposal would slash deficits by $1.1 trillion over the next decade. Two-thirds of those deficit cuts would result from spending reductions, while a third would come from an increase in tax revenue, according to the White House.

Republicans aimed most of their criticism at the tax hikes, which would impact the wealthiest Americans, as well as some companies and the oil and gas industries.

Ways and Means Chairman Dave Camp of Michigan and other Republicans said the president's plan to let tax breaks expire for the upper-income Americans would end up hurting small businesses. They say many small business owners pay their business taxes by filing as individuals, putting them in the nation's top tax brackets.

"There's disappointment on our side that the president's budget brings up some of the same tax hikes on America's small business that Congress, even when both chambers were controlled by Democrats, already rejected," Camp said.

Democrats counter that those small businesses impacted by expiring tax breaks tend to be investment and law firms. They also say the changes would return the nation to tax rates that led to surpluses in the 1990s.

"Our challenge is to figure out a way to restore sustainability and strengthen economic growth," Geithner said. "We're not going to be growing in the future unless we make some tough choices to restore fiscal responsibility."

But Republicans, who now control the House and are under pressure to keep taxes low, made it clear that tax hikes are a non-starter.

Earlier in the day, House Speaker John Boehner also criticized the president's budget proposal for not cutting enough.

Boehner pledged that Republicans would address reshaping entitlement programs, such as Medicaid and Social Security, when they release their budget blueprint this spring.

"Republicans will not punt," said Boehner. "Everything's on the table. We will put forward a budget that deals with the big challenges that face our country...I have no doubts that all of these issues [Social Security and Medicare] will be on the table." To top of page

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