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Obama's Offer to Resolve 'Cliff' Is ‘Sucker’s Game': Ross

President Obama's proposal to extend the middle-class tax cuts before reforming the tax code and entitlements is a "sucker's game," billionaire investor Wilbur Ross told CNBC Thursday.

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"The trade-off the president proposed is not a trade-off," Ross said on "Squawk Box". "To say give me what I want, which is the middle-class relief, and I'll give you a framework for negotiations, that's a sucker's game."

In a press conference on Wednesday, Obama called for an immediate extension of the Bush-era tax cuts on all but the wealthiest Americans to avoid the "fiscal cliff." e added that he'd be willing to negotiate other big issues like ax and entitlement reform at a later date.

(Read More: Obama: Ending Tax Cuts for Rich Resolves Half of 'Cliff'.)

The fiscal cliff refers to the more than $600 billion in automatic spending cuts and tax increases that would take effect on Jan. 1 unless Congress acts to bring down the deficit.

Ross said that what's being obscured in the fiscal cliff debate is not that the country is under taxed, it's that it is spending too much.

"The whole focus is on revenues," he noted. "You can't solve the bulk of the problem with revenues. It's not going to happen."

Moreover, the debate on spending isn't about actual cuts but about reducing the rate of spending growth, Ross added.

Ross also said that the market's continued decline suggests investors are trying to get out before taxes go up next year.

"I think part of the market weakness you are seeing is lots of investors saying, 'This may be my last chance to sell things at the lower capital gains rate,' " he said.

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