President Barack Obama and his aides are dismissing, downplaying and denying various fiscal compromises, setting the stage for a high-stakes clash at the end of December, and potentially the mid-term elections in 2014.
On Wednesday, White House spokesman Jay Carney slashed at a GOP proposal to reduce tax breaks — such as deductions for mortgages interest and charitable donations — available to the 20 percent of Americans who file itemized taxes.
Such “changes to our tax code… are unrealistic politically, that Democrats and Republicans will not vote for,” Carney said. “The right way to do it, because it is mathematically sound and it is the simplest way, is to… not extend tax cuts for the top 2 percent,” he insisted.
Carney’s dismissal was a direct challenge to House Speaker John Boehner, the Republican’s leader, who is negotiating with Obama’s deputies solution to the so-called “fiscal cliff.”
The cliff refers to the synchronized arrival of tax-increase and spending cuts that would remove an extra $500 billion from the economy in 2013, and could shock the weak economy into another recession.
Under pressure from Obama and his allies — including many D.C.-media outlets — Boehner has rallied his House members with a counterproposal that would raise tax revenues by cutting tax breaks without changing current tax rates.
But he president is “not open to pie-in-the-sky proposals that aren’t realistic,” Carney countered.
In closed-door meetings with progressive leaders, Obama and his aides have reassured progressive’s constituency groups — such as La Raza and the Services Employees International Union — they will insist on increases to upper-income tax rates.
The latest signals came Thursday, when CNN reported that Obama privately told Boehner there would be no deal unless Republicans agree to give up their ideological opposition to a tax-rate increase.
There was no mention of offsetting Democratic ideological concessions, such as greater use of market incentives to reduce the cost of federal health care programs.
Raising top-level rates by 2 points will boost federal income by only $60 billion a year, according to some estimates. That is only six percent of the annual deficit, which is now more than $1 trillion.
Obama’s public message is very different from his closed door message.
In public, he’s all about political compromise, cutting taxes for middle class Americans and finding “savings” in future entitlement spending.
He’s taking that pitch to the suburban districts around Philadelphia on Friday, where he’s schedule to give a speech at a toymaker familiar to many swing-voting, middle-income moms around the country.
“There is no reason why taxes on middle class families should go up,” he told reporters invited to photograph the start of a Nov. 28 cabinet meeting.
“It would be bad for the economy… bad for those families… bad for the world economy,” he said. “I am very open to a fair and balanced approach to reduce our deficit and provide the kind of certainty that businesses and consumers need so that we can keep this recovery going,” he insisted.