President Obama's two top economic advisers will not rule out a middle-class tax hike to pay for either the federal deficit or healthcare reform.
Obama pledged repeatedly during the campaign that he would not raise taxes on the middle class, but remarks yesterday by Treasury Secretary Timothy Geithner and National Economic Council Directory Larry Summers suggest the door is still open:
Geithner and Summers both sidestepped questions on Obama's intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to reduce the federal deficit; Summers said Obama's proposed health care overhaul needs funding from somewhere.
"There is a lot that can happen over time," Summers said, adding that the administration believes "it is never a good idea to absolutely rule things out, no matter what."
[snip]
"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."
Suggesting healthcare reform might require a middle class tax increase just as lawmakers are limping back to their districts for the August recess? Whoops...
The "cash for clunkers" program will have to be suspended next week unless the Senate acts to authorize a $2 billion extension for the program, Transportation Sec. Ray LaHood said Sunday.
"If we don't get the $2 billion from the Senate...we would have to suspend the program next week," LaHood said during an appearance on C-SPAN's "Newsmakers" program.
LaHood said he expected the additional money for the rebate program would fund trade-ins of old autos for more fuel efficient vehicles through Labor Day.
"We believe the $2 billion we're very hopeful the Senate will pass this week...will take us through the time that Congress gets back after Labor Day," the former Illinois Republican congressman asserted.
Extended funding for the program passed the House this week by a strong, bipartisan margin, but may face more obstacles in the Senate. Sen. John McCain (R-Ariz.) has signaled he may filibuster the bill, and a key Rust Belt Democrat, Sen. Claire McCaskill (Mo.) has already said she's disinclined to support the bill.
Furthermore, Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine), two of the authors of the initial "cash for clunkers" legislation, asked LaHood for more data on the cost and extent of the environmental impact of the program before the Senate reauthorizes the program.
"If the Senate does not pass the additional $2 billion, the program will get suspended," LaHood cautioned, while also asserting that the environmental standards contained in the first program should be left alone.
The Transportation secretary said that additional purchases using the vouchers will be continued throughout the week until the Senate acts.
If the Senate doesn't act in time, LaHood said the Obama administration would evaluate other options to extend the program.
"I think the conclusion is that the TARP money cannot be used for this," he said, adding that the administration has been evaluating redirecting other federal spending to support the program.
LaHood also defended the effectiveness of the program as one of the most stimulative bits of government spending embarked upon by the White House and Congress.
"It is probably the one real stimulus part that has worked very, very well," he said.
The Obama administration is practicing "trickle down" economic policies, Sen. John McCain (R-Ariz.) argued this weekend.
McCain took the unusual step of using rhetoric often employed to deride Republican policies to hit the Democratic administration's economic management.
"You know, I hate to use the word but it seems to me that the philosophy of Tim Geithner and Ben Bernanke is trickle down, you know?" McCain said in an interview with the Wall Street Journal. "Save Wall Street, save these financial institutions and then maybe they
New taxes on Americans in order to bridge the massive budget deficit are among the range of options being considered by the Obama administration, Treasury Secretary TIm Geithner signaled Sunday.
Geithner said that the Obama administration is committed to bringing down the deficit once the economy has begun to recover, and that it is looking at a variety of ways to achieve that.
"Well, we're going to have to look at we're going to have to do what's necessary," he said during an interview on ABC's "This Week."
"We're not at the point yet where we're going to make a judgment about what it's going to take," the Treasury secretary added when asked if new taxes were "on the table."
"I think what the country needs to do is understand we're going to have to do what it takes, we're going to do what's necessary," he added.
New taxes on high earners are contained in the House healthcare reform bill, in order to finance that bill's initiatives. Income tax cuts established early in the Bush administration, meanwhile, are set to expire in 2011.
Two senators wrote Transportion Secretary Ray LaHood asking for an evaluation of the the "cash for clunkers" program before the Senate takes up a vote to extend the program's funding this week.
Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine), two principal authors of the initial bill, asked LaHood for key statistics on the number of cars purchased under the program, and the extent of the environmental impact expected to be gained by the program.
"We believe that Congress needs this information immediately in order to evaluate the program's effectiveness in attaining its two goals of stimulating automobile sales and reducing oil consumption," the senators wrote. "Without strong data on the effectiveness of the program, it will be more difficult for Congress to evaluate and improve the current program."
The extension of the program may face a bit more of an uphill climb in the Senate compared to the House, which easily passed the fast-tracked bill. Sen. John McCain (R-Ariz.), for instance, pledged to filibuster an extension.
President Obama took criticism of his administration's $787 billion stimulus package head on in his weekly radio address, promising to work until every American who wants a job can find one.
The president piggybacked on a government report Friday showing better-than-expected economic performance in the past few months to argue his administration's economic policies are succeeding.
"The report showed that in the first few months of this year, the recession we faced when I took office was even deeper than anyone thought at the time," Obama said of the quarterly economic analysis published by the Bureau of Economic Analysis (BEA).
The House and Senate will take up efforts to provide funding for the hugely popular "cash for clunkers" program, lawmakers signaled Friday.
The House will consider $2 billion to fund the fuel efficiency program, which burned through its nearly $1 billion budget after only six days of availability to consumers.
The House will vote on the bill as early as today, according to one House Republican Source. The funds will be drawn from re-directed stimulus funds, though it is not clear which programs will be targeted.
The Obama administration has worked with members of Congress to quickly supply more funding for the environmental rebate program, which llows consumers to trade in less fuel-efficient vehicles in exchange for vouchers for new, more environmentally cars, had run out of money after less than a week in existence.
Members of the Michigan congressional delegation met at 9:00 a.m. this morning to discuss options to fund the program.
Sen. Carl Levin (D-Mich.) said Friday morning that the White House had assured Michigan lawmakers that the program would continue to be honored fore the foreseeable future, and signaled that additional funds to extend the program may be sought.
"We have been told by the White House that people can keep buying cars under the program until further notice," Levin said in a statement. "We don
There is a "flurry" of activity in Washington, D.C. to ensure the "cash for clunkers" program will continue to be funded, one of President Obama's senior economic advisers said Friday morning.
"We just got a note from our legislative folks that absolutely, if people want to go out there, the money is still there," Council of Economic Advisers (CEA) Chairwoman Christina Romer during an appearance on CNBC.
"There's a flurry of activity, working with Congress, to make the funds are there for it," she added.
The government had notified lawmakers late on Thursday that the stimulus plan, which allows consumers to trade in less fuel-efficient vehicles in exchange for vouchers for new, more environmentally cars, had run out of money after less than a week in existence.
Rep. Pete Hoekstra (R-Mich.) indicated Monday that the apparent suspension of the program was initiated by the Department of Transportation, only to be reinstated by the White House.
Hoekstra tweeted Friday:
Cash for clunkers was re instated by WH very late last night overruling transportation dept. Lots of guessing on data/very little hard data
Romer seemed to signal that the administration would work to keep the program in place.
"We think it's great for the environment and great for the auto industry, so this is good news," she said of the quick burn through the $950 million allotted for the program.
House Minority Leader John Boehner (R-Ohio) puts his party allegiance before being an American, Rep. Tim Ryan (D-Ohio) alleged Thursday.
Ryan blasted his state colleague for using what he said were "misinformation and fear tactics" when Boehner speaks out against the $787 stimulus package signed into law earlier this year.
"To choose to be a Republican before you're an Ohioan, before you're an American...is wrong," Ryan said on a conference call organized by the Democratic National Committee (DNC).
Ryan labeled claims by the top-ranking House Republican that the stimulus had failed as "absolutely ridiculous," and based on "basic falsehood."
But Ryan, a fourth-term Democrat, didn't stop with his fellow Ohioan. He accused House Minority Whip Eric Cantor (R-Va.) of being "two-faced" for opposing the stimulus while touting some funds that had flowed to his district for a rail system.
Update, 12:39 p.m.: Boehner spokesman Michael Steel responds:
Desperate comments like this show just how out of touch Washington Democrats like Rep. Ryan are. The trillion-dollar 'stimulus' bill isn't meeting the Obama Administration's own standards, and now we've lost three million jobs since January. Democrats promised if it passed, unemployment wouldn't rise above eight percent. Now it's over 11 percent in Ohio. Instead of making political attacks, Democrats would be smart to start working with Republicans to get our economy moving again.
Healthcare reform legislation containing a cooperative insurance plan for consumers is the only proposal likely to muster 60 votes in the Senate, Budget Committee Chairman Kent Conrad (D-N.D.) said Wednesday.
Conrad, also a member of the Senate Finance Committee that's been working furiously to craft a bipartisan health bill, said there's a "good chance" the committee's final bill will include cooperatives in lieu of a public (or "government-run") option.
"In the Senate, a cooperative plan is the only one with the prospects of getting 60 votes," Conrad said during an interview on CNBC this morning.
Negotiations have continued in the Finance committee in recent days, with indications emerging that the committee would abandon the public option.
"There's been no final resolution, but I think there's a good chance the cooperative plan will be adopted, at least at the committee level," Conrad said. "The notion of a cooperative plan is that it's membership-controlled, membership-run -- not government-run, government-controlled."
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