June 18, 2013
Read My Lips: We Need to Raise Taxes
Posted on Aug 4, 2009
By Ruth Marcus
Does President Obama care more about passing health care reform that truly gets costs under control or getting re-elected? Does he care more about getting the nation’s fiscal house in order or getting re-elected?
Right now, the evidence points to getting re-elected. Exhibit A came in Monday’s White House briefing: 45 minutes of press secretary Robert Gibbs restating the president’s “clear commitment in the clearest terms possible, that he’s not raising taxes on those who make less than $250,000 a year.”
Duh, some of you may say. Self-preservation is the first instinct of any politician. Breaking promises and raising taxes is a combination that is toxic to electoral hopes, and it’s naive to expect Obama to walk the tax plank in the midst of the health care fight.
Harsh, others might add, or at least, premature. Obama has said he won’t sign a bill that isn’t paid for. A lot more than George W. Bush did when he charged the new prescription drug entitlement to the national credit card. So give Obama some time to work through the politics and get the policy right.
There are elements of truth in both of these reactions, so let me explain the basis for my frustration.
Rather than readjusting his stance, Obama set it in concrete. The president could have chosen to make this a teachable moment about how the need to spend now would require sacrifice down the road. Instead—with Gibbs’ briefing the latest such example—Obama has boxed himself in. It’s hard to see, at this point, how he wriggles out.
Gibbs was doing damage control following remarks by Treasury Secretary Tim Geithner and National Economic Council Director Lawrence Summers.
Geithner strayed off the reservation first, repeatedly refusing an invitation by ABC’s George Stephanopoulos to rule out a tax increase for the under-$250,000 crowd. “We can’t make these judgments yet about exactly what it’s going to take and how we’re going to get there,” he said. “But the very important thing ... if we want an economy that’s going to grow in the future, people have to understand we have to bring those deficits down.”
Summers, questioned about Geithner’s comments on CBS’ “Face the Nation,” was more nimble. “It’s never a good idea to absolutely rule things out no matter what,” he dodged, “but what the president has been completely clear on is that he is not going to pursue any of his priorities, not health care, not energy—nothing—in ways that are primarily burdening middle-class families.”
Good answers, and here’s why.
On health care, the best way to help pay for expanded coverage would be to at least limit the amount of health care that employers can provide tax-free. This would not only produce needed revenue but help slow rising health costs. Done correctly, most middle-class taxpayers would be better off. According to my reporting, Obama’s economic advisers have urged that the president support a cap; his chief political adviser, David Axelrod, is opposed. So instead of taking the political risk—and angering unions to boot—Obama has held back, hoping that lawmakers would come up with a tax cap themselves. But without presidential leadership, this hasn’t happened.
On the larger fiscal situation, the picture is equally clear. Obama wants a government that is bigger than the revenue it generates, but he is unwilling to acknowledge the implications of that stance. It is politically easier to pretend that the entire problem can be solved on the backs of corporations and wealthy individuals. I’m all for a tax code that is heavily progressive and free of loopholes, but the arithmetic won’t allow all the balancing to be done on a sliver of the population.
These are comments Obama should have let stand—if he had the political courage. Instead, the president who launched his campaign bemoaning “our chronic avoidance of tough decisions” chose to send out his press secretary to clean up after economic advisers who dared to whisper hard truths.
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