(Bloomberg News) President Barack Obama is betting that his re-election gave him the political clout to force Republicans to accept higher taxes on upper-income Americans as a step toward reducing the federal deficit.

Obama’s posture was shown in the proposal Timothy F. Geithner laid out for congressional leaders last week: a reprise of the president’s prior budget proposals, with $1.6 trillion in tax increases and about $350 billion in health care savings, primarily in Medicare. He also asked for an Aug. 1 deadline for decisions on income tax overhaul and further spending cuts. It’s all part of his move to avert a so-called fiscal cliff, with $607 billion in spending cuts and tax increases taking effect in January unless Congress acts.

“You could see the shock in the Republicans -- this is not what they were expecting from the White House,” said Stan Collender, managing director of Qorvis Communications LLC in Washington and a former staff member for the House and Senate budget committees. “There was almost euphoria among Democrats that the president was playing hardball.”

The two parties are in stalemate over what spending cuts and revenue increases should be approved to cut a budget deficit that’s exceeded $1 trillion for each of the four years Obama’s been in office. The administration says no agreement is possible unless Republicans agree to increase tax rates for the highest earning Americans, a stance underscored by Geithner in a sweep of the Sunday talk shows. Republicans oppose any tax rate increase and demand deeper cuts than Obama has offered, a line that House Speaker John Boehner drew on one show yesterday.

No Compromises

Both administration officials and congressional Republicans say they want a deal before year’s end -- without either side publicly offering any compromises.

“There’s not going to be an agreement without rates going up,” Geithner said in a taped interview that aired yesterday on CNN’s “State of the Union” program. Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.”

Obama wants to boost top income-tax rates back to the levels they were when President Bill Clinton left office. The top rate then was 39.6 percent, compared with 35 percent today.

Boehner said Republicans aren’t ready to give in, and the president should take the lead by offering concessions.

House Majority