White House On Tax Hikes: 'A Lot Has Changed' Since Last Round Of Talks

WASHINGTON, DC - DECEMBER 03:  U.S. President Barack Obama addresses the Nunn-Lugar Cooperative Threat Reduction (CTR) sympos
WASHINGTON, DC - DECEMBER 03: U.S. President Barack Obama addresses the Nunn-Lugar Cooperative Threat Reduction (CTR) symposium December 3, 2012 at the National Defense University in Washington, DC. Obama spoke on the 20th anniversary of the CTR program which was established to secure and dismantle weapons of mass destruction and their associated infrastructure in former Soviet Union states.' Obama also warned President Assad of Syria not to use chemical weapons against his people. (Photo by Alex Wong/Getty Images)

WASHINGTON -- House Republicans on Wednesday morning resurfaced a not-so-distant quote from President Barack Obama that seemed to endorse their current approach to the standoff over the expiring Bush-era tax cuts.

During the debt-ceiling negotiations in the summer of 2011, Obama pitched congressional Republicans on the notion that they could raise enough revenue without raising rates, simply by going after loopholes and deductions.

“What we said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes -- tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process that could have lowered rates generally while broadening the base," Obama said in remarks before the press on July 22.

That position is at odds with what the president is arguing now. Faced with the expiration of the Bush-era tax cuts, along with the prospect of $1 trillion in spending cuts over ten years, Obama has demanded that Republicans agree to raising marginal rates on the top two percent of earners. Closing loopholes and capping deductions, he's said, won't get the government enough revenue to dent the deficit. During a sit-down interview with Bloomberg News Tuesday, in fact, the president suggested that the GOP approach would only yield somewhere "in the range of $300 billion to $400 billion."

The Huffington Post asked the White House about the apparent discrepancy between his 2011 and 2012 remarks. Amy Brundage, a top spokesperson, responded by arguing that the political and economic circumstances have changed:

As you saw Erskine Bowles say this week, a lot has changed since we were negotiating with John Boehner in 2011, including an election in which the American people spoke on the need for a balanced approach that protects the middle class and asks the wealthiest Americans to pay slightly higher tax rates. Moreover, even in the 2011 negotiations Speaker Boehner agreed that if tax reform did not work out then there would be decoupling with the middle-class tax cuts made permanent and the rates for high-income households rising.

Since the 2011 negotiations we have taken a hard look at the numbers and the math and there’s simply no plausible and desirable way to achieve the kind of deficit reduction we need without hurting our economy and sticking it to the middle class unless we ask for slightly higher rates for the wealthiest individuals. The math simply doesn’t add up. We are willing to do tough things and compromise to find a solution here. But the fact remains that there’s one thing standing in the way of achieving a deal and that’s the Republicans’ refusal to ask for slightly higher rates for the wealthiest individuals. We are hopeful that they’ll come to the table on this so we can find a solution that has balance and is good for the economy.

This may be a convenient explanation, but politically speaking, it's correct. The president has far more political capital now then he did in the summer of 2011. The fact that he's moving the proverbial goalpost on revenues is a product of that. Perhaps unexpectedly he got a bit of cover for his approach on Wednesday from one of the Senate's most conservative members.

"Personally I know we have to raise revenue," Sen. Tom Coburn (R-Okla.) said on MSNBC's "Morning Joe." "I don't really care which way we do it. Actually, I would rather see the rates go up than do it the other way because it gives us a greater chance to reform the tax code and broaden the base in the future."

This is, as one administration official noted, precisely the argument being made by the president. And as Sen. Chuck Schumer (D-N.Y.) declared shortly thereafter on the Senate floor: "If Senator Coburn does not provide conservative cover, I don’t know who does."



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