Talking taxes, coy on Petraeus

Democrat President Barack Obama sought both to placate and challenge opposition Republicans in Congress on Wednesday, telling reporters that he wanted a far-reaching, cross-party deal on the US budget and tax reform, but cautioning that he intended to end tax cuts for the wealthiest two percent in the country.

In exchange for increasing taxes on those earning more than $250,000 (196,218 euros) per year, Obama offered a pledge not to increase taxes for those earning less - saying that the Democrats and Republicans should first focus on the part of the taxation framework they see similarly.

"We should not hold the middle class hostage while we debate on tax cuts for the wealthy," Obama said on more than one occasion in the press conference. "When it comes to the top 2 percent, what I'm not going to do is extend further a tax cut for folks who don't need it, which would cost close to a trillion dollars."

Republican lawmakers, who control the lower House of Representatives in Congress, have so far opposed any increases in taxes.

Tax cuts introduced by former President George W. Bush, and subsequently extended by Obama, are set to expire in January. Under the current legislation, the tax code for all US citizens would revert to the prior levels - Obama is seeking a deal whereby most of the benefits endure, but not for the top earning bracket.

'No evidence' of security breach with Petraeus

The US president largely ducked questions on the extra-marital affair that led last week to the resignation of the CIA director and decorated general, David Petraeus.

Obama said that from what he had seen so far, there was no indication that Petraeus' personal activities had compromised national security.

"I have no evidence at this point that classified information was disclosed that in any way would have had a negative impact on national security," Obama said.

The president also spoke in the top general's defense; he had provided the US with "an extraordinary service," Obama said, "we are safer because of the work Dave Petraeus has done."

Petraeus ultimately quit his post after an FBI probe into the communications of his biographer and mistress, Paula Broadwell. Obama learned about the investigation in its latter stages. Asked whether he felt he should have been told earlier, Obama remained tight-lipped.

"I am withholding judgment with respect to how the entire process surrounding General Petraeus came up. We don't have all the information yet," Obama said. "But I want to say that I have a lot of confidence generally in the FBI, and they've got a difficult job."

"It is also possible that had we been told [about the probe], that you'd be sitting here asking why we were meddling in a criminal investigation," Obama said.

msh/slk (AFP, AP, dpa, Reuters)