Economy & Budget

Is White House disputing Bowles on tax rates or not?

Is White House disputing Bowles on tax rates or not?

Is the White House disputing Erskine Bowles’ claim that the president is flexible on whether to raise taxes on the highest wage earners? Or is it sending a signal that President Barack Obama will indeed compromise with congressional Republicans on their major point of disagreement in the ongoing deficit debate?

Hours after deficit reduction commission co-chairman Bowles told a Christian Science Monitor breakfast that the president was flexible on whether to raise rates (“I didn’t sense it, I heard it,” Bowles said, “not only from the team but from the president”), press secretary Jay Carney was asked about this “flexibility” issue.

“Well, setting aside rates so that you don’t take my answer to this question to mean specifically—to reflect specifically on rates—if I told you how much flexibility the President had, it would eliminate his flexibility,” said Carney, “So the president made clear that he is not wedded to every detail of his plan.”

Then, almost as if to reassure his supporters who want to raise taxes on the highest wage earners, Carney quickly added: “The president has also made categorically and abundantly clear that he will not sign an extension of the Bush-era tax cuts for top earners. It’s bad economic policy and we cannot afford it. He will not sign that.”

Carney then sounded a bit like Bowles and commission co-chairman Alan Simpson when they urged compromise and praised alternative plans offered by Republican Sens. Pat Toomey (Pa.) and Bob Corker (Tenn.).

Obama, Carney said, “is open to serious, realistic, concrete proposals about how we can get from here to there when we talk about building a balanced package that achieves the kind of deficit reduction target that he set, and that the Simpson-Bowles commission set, and that others have set.”

He went on to second Bowles’ remarks at breakfast that Obama “wants to make sure [the revenue] is real” and that getting “some major portion” of it from “the top two per cent” was the best way to go.

“The president is very interested in closing loopholes and capping deductions where sensible both economically and plausible politically,” said Carney, “but the fact remains that the cleanest, simplest way to achieve the kind of revenue target that’s necessary here is to go back to the Clinton-era rates for top earners — rates, by the way, that were in place during the longest period of economic growth — peacetime economic expansion in our lifetimes.”

It appears very likely that Carney will be asked whether the president in the days and weeks ahead will be as flexible as Bowles indicated.

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