President Obama, seeking a Republican agreement to raise the nation's $14.3 trillion debt ceiling by Aug 2, will not insist that any deal include an end of President Bush's controversial tax rates on the wealthy.
Obama's tactics are coming into clearer focus: they involve seeking higher taxes not on a broad swath of high income earners but on a narrower band of the super rich, such as owners of private jets. This means that those who earn $250,000 have got a reprieve.
Obama still wants to scrap those rates, but with time running out on the debt-ceiling talks, he is making it clear Monday that he has a new range of targets.
“When we’re talking about the revenue that’s on the table, we’re not talking about the issue that the president’s put forward in his framework, and that is the Bush tax cuts and the tax cuts to the wealthiest Americans,” White House press secretary Jay Carney said Monday.
He said the White House is targeting tax breaks for oil and gas companies, which also go to other U.S. manufacturers, and tax breaks the White House says are provided to the owners of private jets.
“This is about subsidies for oil and gas companies — $40 billion — a loophole that allows for the owners of private corporate jets to benefit enormously in the billions, compared to, say, Delta or American Airlines, and other measures that benefit millionaires and billionaires, or in some way, you know, complicate our tax code in a way that it isn’t helpful,” Carney said.
Democrats for years have sought to eliminate the Bush tax rates for families with income more than $250,000, though Obama broke a campaign promise in December and agreed to extend those rates for two years.
While most didn’t expect the Bush tax rates to be included as part of a debt-ceiling deal, it’s significant the White House is publicly drawing the distinction.
It could also put more pressure on Republicans, who say tax increases should be off the table. There are some differences within the GOP over whether this should include all tax deductions and credits, and it could be politically tougher for Republicans to defend some specialized tax breaks while social programs are being slashed.
Many Senate Republicans two weeks ago voted to end a tax credit for the ethanol industry.
“On the issue of revenues, do we perpetuate a system that allows for subsidies in revenues for oil and gas, for example, or owners of corporate private jets, and then call for cuts in things like food safety or weather services, things that the federal government really does need to do on American citizens; or do we look at everything and we take a balanced approach?” Carney said. “We obviously believe a balanced approach is the right approach.”
Administration officials said the president has not changed his mind about the Bush tax cuts, but they are not the focus of talks to raise the debt ceiling.
Officials said there has been no shift in policy, and the administration sees a way to cut spending in the tax code by closing loopholes and ending subsidies.