By Russell Berman and Bernie Becker - 06/07/12 12:05 AM EDT
The White House on Wednesday rejected renewed GOP calls to maintain current tax rates for the wealthy after former President Clinton appeared to endorse the idea.
Clinton’s suggestion that Congress temporarily extend all of the current rates to protect the economy caused yet another political headache for the White House and congressional Democrats, who have vowed to do away with tax cuts for the wealthy.
From the White House on down, Democrats were left to play defense. A spokesman for President Obama insisted the president’s position on taxes had not wavered, and Democrats in Congress said even though they disagreed with Clinton’s initial assertion, the former two-term president remained one of the party’s most effective champions.
“Eight days a week I am happy Bill Clinton is one of the leaders of our party. That hasn’t changed,” Rep. Robert Andrews (D-N.J.) said. “I just don’t agree with him on the substance of this.”
In the CNBC interview on Tuesday, Clinton said he didn’t have a problem with extending all of the tax cuts temporarily to avoid the year-end “fiscal cliff” that economists warn could slow the economy or even cause a recession.
Compounding the quandary for Democrats, a former top Obama economic adviser, Larry Summers, was forced to explain comments he made Wednesday morning on MSNBC that were read by some as endorsing a temporary extension of the Bush rates. Summers was quoted afterward saying he fully supported Obama’s position on taxes.
The episodes were the latest twists in a long-running intraparty debate over the tax rates that Obama inherited from his predecessor. After pledging to end the tax cuts for family income over $250,000 in the 2008 campaign, Obama agreed to a two-year extension of the rates in late 2010 after Democrats were decimated in the midterm elections. He has since vowed not to relent a second time, and White House press secretary Jay Carney on Wednesday said that promise remained in place.
“The president’s position is that we absolutely should extend the tax cuts for the middle class; we should not extend and he will not extend tax cuts for the highest-income Americans,” Carney told reporters aboard Air Force One, according to an official transcript. “President Obama has been clear about his position, and it has not changed,” he added under repeated questioning from reporters. “We should not extend, and he will not extend, the tax cuts — the Bush-era tax cuts for the wealthiest 2 percent of the American people. It’s bad policy.”
In arguing that Obama and Clinton agreed on tax policy, Carney and other Democrats relied on a statement issued by Clinton’s spokesman after his CNBC interview that appeared to contradict the president’s comments.
The Clinton spokesman, Matt McKenna, insisted Clinton “does not believe the tax cuts for the wealthiest Americans should be extended again.”
Asked about Clinton’s comments, House Minority Leader Nancy Pelosi (D-Calif.) replied: “I think he’s backtracked on them, hasn’t he?”
But congressional Republicans brushed right by Clinton’s clarification and accepted his initial remarks as a political gift from a man they once impeached.
“Extending all the current tax rates for at least a year is really important if we’re going to help job creators and give them more confidence to put Americans back to work,” House Speaker John Boehner (R-Ohio) said at a morning news conference. “Even Bill Clinton came out for it — before he was against it.”
The House GOP conference chairman, Rep. Jeb Hensarling (Texas), added: “Obviously, President Bill Clinton gets it. He knows you should not be raising taxes on anybody.”
For Democrats, the expiration of the Bush tax rates is both a policy priority and a crucial bargaining chip heading into a post-election showdown over taxes, spending cuts and the debt ceiling.
“We have to have a clear and cohesive position,” Rep. Peter Welch (D-Vt.) said.
Welch also said that it would be “political malpractice” if Democrats gave up whatever leverage they have with looming spending cuts that will take a big hit out of defense and national security — and which Republicans desperately want to undo.
“It would be extremely reckless of Democrats to capitulate before the negotiations begin,” the Vermont Democrat said.
But some Democrats did tell The Hill on Wednesday that they could get on board with a short-term deal that extended all tax rates and didn’t implement spending cuts, as a way to either keep the economy from contracting or pave the way for a grand deficit bargain.
Rep. Richard Neal (Mass.), the top Democrat on a House Ways and Means subcommittee that deals with taxes, said he would listen to a proposal for some “breathing room” if he thought a substantial deficit deal could be achieved.
But Neal, who voted against the Bush rates originally and when they were extended in 2010, said Democrats had hurt themselves when dozens of them voted for the tax cuts to begin with.
“It distorted our message,” he said.
The back-and-forth on Wednesday also brought the spotlight back to Clinton, and Democrats wondered about the intentions of a man whose reputation as the party’s top campaigner is occasionally undermined by his tendency to veer off message.
Still, Democrats said they were more than happy to have Clinton as a surrogate, and acknowledged that the former president’s apparent freelancing is simply part of the package.
Clinton recently undercut the Obama campaign by saying that the presumptive GOP nominee, Mitt Romney, had a “sterling” business record — a compliment that conflicted with Democratic attacks on Romney’s record at his private-equity firm, Bain Capital.
“I love Bill Clinton. I’ve known Bill ever since he beat me in the presidential race,” said Sen. Tom Harkin (D-Iowa), who made a 1992 bid for the Oval Office. “But the one thing that Bill Clinton has always been good at is — what’s that called? — triangulation.”