Frank: White House 'gravely mistaken' in tax cut strategy

The White House is "gravely mistaken" to deal on tax cuts while congressional Democrats seek tax-cut legislation that lets the breaks expire for the highest earners, a top Democrat said.

Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, echoed liberal disappointment in President Obama's negotiators for reportedly looking to cut a deal with Republicans on taxes that would allow a short-term extension of tax cuts for all income groups.

"I'm very disappointed in it. I think it's gravely mistaken, and I'm sure my colleagues share that," Frank said Thursday evening on MSNBC.

Treasury Secretary Tim Geithner and Office of Management and Budget (OMB) Director Jack Lew have met this week with congressional negotiators to discuss the fate of the Bush-era tax cuts, which are set to expire at the end of the year.

They did so as the House voted to extend all the expiring tax cuts except for households making more than $250,000 per year, mirroring the president's initial opinion on the expiring taxes. Incoming House Speaker John Boehner (R-Ohio) dismissed the move as a "chicken crap" stunt because that legislation is seen as unlikely to advance beyond Republican opposition in the Senate.

Reports have emerged that the administration would allow an extension of all tax cuts for some amount of time — a concession to the GOP — in exchange for an extension of unemployment benefits and expiring tax breaks meant to spur job creation. But the White House sought to reassure liberals by calling those reports "inaccurate and premature" in a statement  Thursday.

"I think it so undercuts their argument against unemployment compensation and their pretense that they care a lot about the deficit, they put deficit production behind helping wealthy people and also wasting money in the military and some of these efforts," Frank said.

But the outgoing chairman also said the administration still has time to reverse course on taxes.

"It is up to the White House. Now, I hope by tomorrow they'll be saying, 'Look, what we saw ourselves was doing was strengthening their hand in the negotiation,'" Frank explained. "It is not too late for them to accept that support."