It’s hard to figure out what President Obama was aiming for in the brief press conference he gave this afternoon.
On one hand, he offered a little optimism, “It appears that an agreement to prevent this new year’s tax hike is within sight.” According to the Huffington Post, Senate lawmakers are crafting a deal that would keep the Bush tax cuts for all income under $400,000 for individuals and $450,000 for joint filers—a concession to Republicans—and raise taxes on capital gains and dividends 20 percent. The estate tax rate would rise to 40 percent, with the threshold ostaying at $5 million. In return, Democrats would get a five-year extension of stimulative tax policies like the Earned Income Tax Credit, the Child Tax Credit, as well as a one year extension of a stimulus related provision for small businesses.
This deal would give Democrats far less revenue than what they’ve asked for over the last month, but it would also pump a fair amount of needed money into the economy, which is still recovering from the recession.
With that said, Obama also took a somewhat combative tone, reiterating his preference for a “grand bargain”—despite the fact that there’s no political space for it in the GOP-controlled House of Representatives—and highlighting the extent to which he would not accept further spending cuts, telling the audience—a group of “middle-class Americans”—that “revenues need to be part of the equation” in eliminating the automatic spending cuts slated to take effect tomorrow (otherwise known as the sequester). “If Republicans think I will finish the job on deficit reduction with spending cuts alone,” said the president, “without asking for equivalent sacrifice from millionaires…then they have another thing coming. That’s not how this is going to work.”
The GOP response, as you can imagine, was less than enthusiastic. According to the New York Times, senior Republicans accused him of “moving the goal posts” and “holding the middle-class hostage” to a “balanced” agreement on the sequester.
If the goal of this press conference was to move the ball forward on an agreement, it seems to be a wash—you don’t encourage compromise by sticking your finger in the eye of the opposition. But it could be that this was more posturing than substance, an attempt to shift the blame to Republicans in the event an agreement isn’t reached, which—given the fundamental divide between both sides—is still possible, if not likely. In any case, we’ll soon find out.