GOP: Obama once backed our loophole plan

From The Washington Times

Obama changes tune on budget

Tax hike on rich not part of 2011 deal

While he now demands that higher tax rates for the wealthy must be part of a “fiscal cliff” deal, President Obama took a very different line just over a year ago in the last major clash with Congress over a long-term budget deal.

In comments Republicans on Capitol Hill are highlighting, Mr. Obama argued in the summer of 2011 that the government could raise more than $1 trillion in revenue without increasing tax rates paid by the rich — something the president now contends is mathematically impossible.

“What we said was, give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes — tax rates — but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax-reform process that could have lowered rates generally while broadening the base,” the president said at a July 22, 2011, White House news conference.

Mr. Obama’s position today is that his $1.6 trillion plan to avoid the fiscal cliff of tax increases and deep spending cuts must include higher tax rates for the top 2 percent of the income scale.

“It’s not me being stubborn. It’s not me being partisan. It’s just a matter of math,” Mr. Obama said this week in an interview with Bloomberg.

During remarks to corporate CEOs at the Business Roundtable on Wednesday, Mr. Obama called on the leaders to urge Republicans to accept the tax-rate increases and not to use the debt ceiling to gain leverage for more entitlement cuts in the fiscal-cliff negotiations.

The president made the comments on a day when he and House Speaker John A. Boehner, Ohio Republican, spoke by phone about a deal to avoid the fiscal cliff. Aides to both men gave no details about the call, and no plans for a face-to-face meeting were announced.

Separately, Treasury Secretary Timothy F. Geithner was laying down a much tougher line by saying the administration was “absolutely” prepared to go over the fiscal cliff if Republicans refuse to bend on higher tax rates for the wealthy.

“There’s no prospect in an agreement that doesn’t involve those rates going up on the top 2 percent of the wealthiest Americans,” Mr. Geithner, one of the White House’s lead negotiators in the talks, told CNBC in an interview.

His remarks drew an immediate rebuke from one key Republican.

“This is one of the most stunning and irresponsible statements I’ve heard in some time,” said Sen. Orrin G. Hatch of Utah, the ranking Republican on the Senate Finance Committee.

Republicans on Capitol Hill quickly denounced the statements from Mr. Obama on the debt ceiling, saying raising the federal government’s borrowing limit is Congress‘ job and should remain so, despite Mr. Obama’s proposal to make it more difficult for lawmakers to block an increase.

“The president wants to have the ability to raise the debt ceiling whenever he wants, for as much as he wants, with no responsibility or spending cuts attached,” said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, Kentucky Republican. “This is an idea opposed by Democrats and Republicans alike; it’s a power grab that has no support here.”

Highlighting inconsistencies

Mr. Boehner’s office on Wednesday was highlighting media reports on the White House’s shifting line on tax increases, saying Mr. Obama’s previous position aligned closely with the plan House Republicans are offering.

Republicans have demonstrated “there is a middle-ground solution that can cut spending and bring in revenue without hurting American small businesses,” Mr. Boehner said in a statement. “It’s a solution President Obama himself once supported. If the math worked in 2011, why doesn’t it work today?”

Mr. Obama didn’t lay out the specifics of his 2011 plan at the time — exactly which deductions and loopholes he would target to produce the revenue. He is now criticizing Republicans for failing to lay out the details of their plan.

But in making his offer to Mr. Obama this week, Mr. Boehner cited a nine-page report by the Committee for a Responsible Federal Budget, a nonpartisan, business-backed group that provided three options for finding the necessary revenue by limiting deductions without increasing tax rates.

White House officials said Republicans are not telling the full story about Mr. Obama’s 2011 quote. The president’s comment, they said, was part of an agreement with Republicans to spend the next year overhauling the tax code to find additional revenue, and if Washington couldn’t get all the complex tax changes through Congress by the end of 2012, tax rates on the top 2 percent of Americans would go up.

Jason Furman, deputy director of the National Economic Council and an assistant to the president for economic policy, also said the White House has “done a lot of work” in the past year in crunching numbers and now “knows more about tax reform” than it did in 2011.

“We didn’t sit here twiddling our thumbs,” Mr. Furman told reporters during a briefing Wednesday.

“So just at a purely analytical level, we know more about tax reform, we know more about tax expenditures, we know more about all of those topics now than, we’ve, you know, known before,” he said.

One of the items that the president’s economic team evaluated was the idea of capping deductions at $25,000 for all Americans. But that proposal, Mr. Furman said the White House found, would raise taxes by an average of $2,400 on 17 million middle-class households and would create a serious disincentive for all Americans who hit that threshold to contribute to charities because they wouldn’t get a tax benefit for doing so.

Placing the limit on households making more than $250,000 would generate only $800 billion, Mr. Furman said, and would create an immense “cliff,” in which someone whose income rose to $251,000 could suddenly owe thousands of dollars more in taxes.

From Greenvilleonline.com

President Obama and John Boehner / Carolyn Kaster, AP

Turns out that President Obama once backed the idea of raising more government revenue by closing tax loopholes rather than by raising tax rates.

Congressional Republicans are flagging this Obama comment from 2011: "What we said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes -- tax rates -- but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process that could have lowered rates generally while broadening the base."

In current negotiations to avoid the "fiscal cliff," Obama backs higher tax rates for the wealthy, specifically by eliminating the George W. Bush-era tax cuts for Americans who make more than $250,000 annually.

House Speaker John Boehner, R-Ohio, has pitched a plan that raises revenues by closing loopholes and eliminating or reducing certain tax deductions. "There is a middle ground solution that can cut spending and bring in revenue without hurting American small businesses," Boehner said.

Obama and aides say the GOP plan won't raise nearly the $800 billion over a decade that it claims, at least not without eliminating popular deductions such as the ones on charitable contributions and home mortgage payments. "When you look at the math, it doesn't work," Obama told Bloomberg Television on Tuesday.

Said a statement from Boehner's office: "It's a solution President Obama himself once supported. If the math worked in 2011, why doesn't it work today?"

Both parties are seeking to avoid the "fiscal cliff," the series of tax increases and budget cuts that take effect in 2013 without a debt reduction agreement.

White House spokesperson Amy Brundage responded:

"As you saw Erskine Bowles say this week, a lot has changed since we were negotiating with Speaker Boehner in 2011, including an election in which the American people spoke on the need for a balanced approach that protects the middle class and asks the wealthiest Americans to pay slightly higher tax rates.

"Moreover, even in the 2011 negotiations Speaker Boehner agreed that if tax reform did not work out then there would be decoupling with the middle-class tax cuts made permanent and the rates for high-income households rising.

"Since the 2011 negotiations we have taken a hard look at the numbers and the math and there's simply no plausible and desirable way to achieve the kind of deficit reduction we need without hurting our economy and sticking it to the middle class unless we ask for slightly higher rates for the wealthiest individuals. The math simply doesn't add up.

"We are willing to do tough things and compromise to find a solution here. But the fact remains that there's one thing standing in the way of achieving a deal and that's the Republicans' refusal to ask for slightly higher rates for the wealthiest individuals. We are hopeful that they'll come to the table on this so we can find a solution that has balance and is good for the economy."



From The Huffington Post

WASHINGTON -- President Barack Obama has rejected an idea put forward by House Speaker John Boehner and other Republicans to close unspecified tax loopholes in order to pay for extending all tax cuts as part of a deal to avoid the so-called fiscal cliff. Obama's simple explanation: I won.

"But when it comes to the top 2 percent, what I'm not going to do is to extend further a tax cut for folks who don't need it, which would cost close to a trillion dollars. And 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 president said at a White House news conference on Wednesday.

"The math tends not to work," he said.

He then pivoted to the campaign. "If there was one thing that everybody understood, that was a big difference between myself and Mr. Romney, it was when it comes to how we reduce our deficit, I argued for a balanced, responsible approach -- and part of that included making sure that the wealthiest Americans pay a little bit more," he said. "By the way, more voters agreed with me on this issue than voted for me."

"The only question now is, are we going to hold the middle class hostage in order to go ahead and let that happen?" said Obama.

The answer was a firm reply to Republicans who have said they are open to closingas-of-yet-unspecified loopholes as part of tax reform while they remain opposed to raising tax rates.

"Take away the loopholes," said Rep. Paul Ryan (R-Wis.) on Tuesday. "That's a better way to do it."

Some Senate Democrats are said to favor that approach, too.

While both Democrats and Republicans generally support closing loopholes in the abstract, naming actual loopholes to remove is politically thorny because many of them have powerful constituencies.

In a follow-up question on loopholes, Obama said he wouldn't "slam the door in their face" if Republicans came up with an approach that raised revenue without raising rates. However, he soon returned to his original position and said he didn't want to get into a "situation where the wealthy aren't paying more or aren't paying as much as they should and middle-class families are paying the difference."

Obama held the same position against extending Bush-era tax cuts for the wealthy prior to an earlier expiration date at the end of 2010, but ultimately agreed to an extension as part of a deal creating a payroll tax cut and extending unemployment insurance. He said Wednesday that the 2010 trade-off was a one-time thing.

"Two years ago the economy was in a different situation," the president said. "What I said at the time was what I meant. This was a one-time proposition."