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Obama takes his case to people for "fiscal cliff" deal

U.S. President Barack Obama speaks to the Nunn-Lugar Cooperative Threat Reduction symposium at the National Defense University in Washington
U.S. President Barack Obama speaks to the Nunn-Lugar Cooperative Threat Reduction symposium at the National Defense University in Washington

By Steve Holland

REDFORD, Michigan (Reuters) - Making no visible headway in direct talks with Republicans, President Barack Obama took to the road on Monday to apply pressure on his political opponents to agree to a "fiscal cliff" deal that would raise taxes on the richest Americans.

Wearing shirtsleeves with no suit coat and speaking in front of an array of auto workers, Obama plunged into his new campaign a month after winning re-election on a vow to raise taxes on the wealthiest and take care of the middle class.

Obama made his appeal in Michigan where his popularity is high due in part to the 2009 government bailout of the state's auto industry. He won Michigan easily in the November 6 election.

Now, Obama is trying to convince Americans that congressional Republicans need to avert a year-end fiscal crisis by increasing taxes on people making more than $250,000 a year.

If no agreement is reached by January 1, Bush-era tax cuts on all Americans expire and spending cuts agreed to last year kick in, a scenario known as the fiscal cliff that could hurl the economy back into recession.

A typical middle-class family of four, Obama said, would see an income tax hike of $2,200 a year if no deal is done.

"How many of you can afford to pay another $2,200?" he asked workers at a Daimler automobile manufacturing plant near Detroit. "That's a hit you can't afford to take."

Polling shows most Americans would blame Republicans if the country goes over the fiscal cliff, and pressure has been building from some Republicans for House of Representatives Speaker John Boehner to get an agreement quickly, even if it means tax hikes on the wealthiest.

Obama painted a stark picture of what would happen if bipartisan talks fail.

Consumer spending would go down because families would have less expendable income, meaning businesses would have fewer customers and the economy would go into a "downward spiral," he said.

"There's good news," he said. "We can solve this problem."

Republicans accuse Obama of not proposing sufficient cuts to entitlements, like the Medicare health insurance program for seniors, to make a tax increase more palatable to Republicans.

The two sides have hit back at each other with rhetorical broadsides and appear no closer to an agreement than they did a month ago. The White House and Boehner's office held more talks on Monday.

The Michigan trip was Obama's second to hammer away on the fiscal cliff theme, after a stop in Pennsylvania on November 30.

(Editing by Alistair Bell and Eric Beech)

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