On Monday, White House press secretary Jay Carney made clear the president was maintaining that position. “Math tells us that you can’t get the kind of balanced approach that you need without having rates be part of the equation,” he said. “We haven’t seen a proposal that achieves that, a realistic proposal that achieves that.”
Carney, however, also embraced the view that any plan to tame the national debt would require adjustments to the nation’s health programs for the elderly and the poor, Medicare and Medicaid.
Obama “believes and understands that in order to achieve a deal, a compromise, that everybody has to make some tough choices, and he remains committed to that principle,” Carney said.
On the other hand, he said the White House is less interested in tackling the rising cost of Social Security during the current talks, echoing Senate Democrats who have said the program should be reviewed separately next year. “Social Security is not currently a driver of the deficit. That’s an economic fact,” he said.
In addition to pursuing private talks, the White House began making a public push on Monday. Obama is strongly considering holding events in Washington or elsewhere later this week to argue for extending current tax rates for 98 percent of Americans and letting rates rise for the wealthy, according to administration officials.
White House officials met Monday with the leaders of two major business groups — the Business Roundtable and the U.S. Chamber of Commerce — part of Obama’s campaign to persuade business executives to get behind a deal that raises $1 trillion or more in tax revenue. Obama plans another meeting with executives Wednesday.
As part of its campaign over tax rates, the White House published a report Monday warning that the average family will pay $2,200 more in taxes next year if Congress does not freeze rates for the middle class.
The White House report says Americans could dramatically pull back on spending in the crucial holiday season if they expect sharp tax hikes next year that would cut deeply into take-home pay. A tepid shopping season would interrupt a string of positive data in recent weeks that suggest Americans are opening their pocketbooks after years of post-recession caution.
If the middle-class tax cuts and related provisions were to expire, the economy could lose $200 billion in 2013, according to the White House report, which was completed by the Council of Economic Advisers and National Economic Council.
Analysts at the nonpartisan Congressional Budget Office and the independent Tax Policy Center have arrived at similar conclusions.
Consumer spending represents the lion’s share of economy activity, and nervousness about higher taxes could take a bite out of the economy as the year comes to an end. One-fifth of annual retail sales take place between now and Jan. 1.
Consumer confidence took a dive in the summer of 2011, when the nation flirted with a default on its debt and Congress was paralyzed over questions of taxes and spending.
So far, such fears are not yet apparent among consumers this holiday season. This past weekend, consumers spent $59.1 billion on holiday shopping, 13 percent more compared with last year.
The White House report says that letting the middle-class tax cuts expire — and failing to patch the alternative minimum tax, which applies to many upper-middle-class households — could trim consumer spending by 1.7 percent in 2013. That, in turn, would slow economic growth by 1.4 percent.
Paul Kane contributed to this report.