Obama Bloomberg Interview: Boehner's Plan 'Still Out Of Balance'

In his first post-election interview, President Barack Obama reiterated his demand that congressional Republicans agree to a deficit reduction plan that includes raising high-end tax rates, while adding that he didn't expect to get all of his priorities passed either.

But in the sit-down with Bloomberg News' Julianna Goldman, Obama did not directly state whether he would demand that those rates on top earners be raised to their 2000 level of 39.6 percent, or somewhere between that and their current level of 35 percent. Moreover, he suggested that his primary goal at this juncture was not to pursue some form of broad tax and entitlement reform, but a "down payment" that would get Congress past the so-called fiscal cliff and into the position to engage in more sustained, level-headed negotiations.

"We are not going to be able to come up with comprehensive tax reform package that gets it all done just in the next two weeks," Obama said. "We are not going to be able to come up with necessarily a comprehensive entitlement reform package that gets it all done in the next two weeks. When you look at what Ronald Reagan did back in 1986 working with Bill Bradley and others, that was a year-and-a-half process ... Let's essentially put a down payment on taxes. Let's let taxes on upper-income folks go up."

The president scoffed at a proposal put forward by Speaker John Boehner (R-Ohio) on Monday that included raising the eligibility age for Medicare, changes to the payment structure of Social Security and revenue hikes totaling $800 billion.

"Unfortunately, the Speaker's proposal right now is still out of balance," he said.

Obama suggested that the math didn't add up, noting that the speaker was only looking at closing loopholes and lowering deductions, rather than raising rates. Obama pegged savings from those two actions at somewhere between $300 billion and $400 billion -- or as he put it, "not enough."

Obama has agreed to raise Medicare's eligibility age from 65 to 67 in past negotiations with Boehner. But he refused to commit to doing so this time around. The impression left was that of a president who felt he held the advantage heading into the critical final weeks of the lame-duck session. (Obama declined to commit to a face-to-face sit-down with Boehner.)

But when pressed specifically, Obama left the door open to easing off some of his demands as well. Goldman asked if he would be comfortable with the top-end tax rates ending up somewhere short of 39.6 percent, and he didn't directly answer:

In fact, I do believe that we can simplify the tax system. And by closing some loopholes and deductions, and by cleaning out some of the underbrush in the tax code, that we can have a fairer, more efficient system. On entitlement reform, I did not expect Republicans to agree to any plan where they are just betting ... that it will happen. We would have to have some specific down payments now, recognizing that we would then have to continue to work to see if we could come up with even better idea to reduce health costs over the long term. So that is the framework we are operating on. And within that framework, I am happy to be flexible. I recognize I'm not going to get 100 percent. But what I'm not going to do is agree to a plan in which we have some revenue that is vague and potentially comes out of the pockets of middle-class families in exchange for some very specific and tough entitlement cuts that would affect seniors or other folks who are vulnerable.



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