President Obama cast himself as an open-minded negotiator during his first, postelection press conference—even as his words amplified the administration’s increasingly tough stance on taxes.
The president seemed unwilling to back down in any way on his call to raise taxes on the top 2 percent of American taxpayers roughly one week after the general election. “What I have told leaders privately as well as publicly is that we cannot afford to extend the Bush tax cuts for the wealthy,” Obama told reporters on Wednesday.
This oft-repeated sentiment and his opening bid for revenue of $1.6 trillion (roughly twice the amount of revenue he sought from Republicans during last summer’s debt-ceiling negotiations) sharply contrasted with his calls for some type of big budget deal.
Republican leaders, after all, have said they oppose any increase in tax rates, preferring instead to find new revenue through tax reform. “Time is running short, and, frankly, we don’t have time to waste on offers that are going nowhere,” said House House Ways and Means Chairman Dave Camp, R-Mich. “Speaker [John] Boehner, on the very first day after the election, took the responsible approach and offered a compromise that included tax revenues in exchange for entitlement reforms.”
But Obama seemed unwilling to budge from his campaign promises and shot down idea after idea on different ways to find new revenue apart from increasing individual tax rates. He dismissed the idea of finding revenue solely through future economic growth, a type of analysis known as dynamic scoring. He derided the idea of finding $1.6 trillion in revenue through the closing of loopholes. And, even the theory of limiting tax deductions—a version of which appears in his own past budgets—was deemed as not enough.
"It's very difficult to see how you make up that trillion dollars, if we're serious about deficit reduction, just by closing loopholes and deductions. The math tends not to work, and I think it's important to establish a basic principle that was debated extensively during the course of this campaign,” the president said.
Even when Obama offered to take a look at any good deficit-reduction idea, that promise came with a caveat. “I’m not just going to slam the door in their face. I want to hear ideas from everybody,” he said. Then, just as quickly, he added that he would only take seriously ideas that protect the middle class, that include new revenues, and that maintain the progressivity of the tax code. In other words, all trademarks of a Democratic-based deficit deal.
Such strong rhetoric left the Republicans (and even some of the moderate Democrats on the Hill) with little wiggle room for a compromise. And, that may have been the point during this first week back in session for Congress.
“If despite the election, if despite the dangers of going over the fiscal cliff and what that means for our economy, that there’s too much stubbornness in Congress that we can't even agree on giving middle-class families a tax cut, then middle-class families are all going to end up having a big tax hike,” the president said. “ And that’s going to be a pretty rude shock for them.”
That was Obama’s last major public statement on the fiscal cliff before meeting with both Republican and Democratic congressional leaders on Friday—and it certainly was a bid in which the president staked out a position that sends the clear message. This is not the 2010 lame duck, he seemed to imply, when Democrats extended all of the Bush-era tax cuts. This Democratic White House is not going to give up its quest for new revenue, no matter what.
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