Obama's Tax Pledge -- Carved In Stone Or Not? : The Two-Way Here's one to keep an eye on. President Barack Obama's budget director Peter Orzag appeared on Wednesday to let a little daylight slip between his boss' campaign pledge not to raise taxes on those with incomes under $250,000 and what might happen ...
NPR logo Obama's Tax Pledge -- Carved In Stone Or Not?

Obama's Tax Pledge — Carved In Stone Or Not?

Here's one to keep an eye on. President Barack Obama's budget director Peter Orzag appeared on Wednesday to let a little daylight slip between his boss' campaign pledge not to raise taxes on those with incomes under $250,000 and the future.

According to the Daily Beast's Lloyd Grove, Orzag gave some people attending a newsmaker breakfast sponsored by Thomson Reuters the impression that there might now be more flexibility in that pledge than previously seemed the case.

A Beast excerpt:

This morning at a Manhattan breakfast sponsored by Thomson Reuters, White House Budget Director Peter Orszag threw that pledge out the window. Instead, he described Obama's "read my lips, no new taxes" pledge as a "stance" and a "preference" that is subject to study by the president's newly-formed bipartisan Commission on Fiscal Responsibility.

"The president has been very clear about what he prefers," Orszag said under questioning from Thomson Reuters' Chrystia Freeland. "That was his stance during the campaign, and he still believes that's the right course forward. But he has also been very clear that we shall let the commission go do its work."

Freeland followed up, asking if that means the White House might be open to the idea. "Perhaps here's some give there?"

"I don't feel like I'm in a position to say that there will be any give there," Orszag parried. "But the president has been very clear that the commission should go explore whatever options they all deem to be appropriate."

Later on during the breakfast, Orszag resisted my attempts to pin him down when I asked if the White House could live with a tax increase on the middle class.

"No, I didn't say that," he answered. "What I did say is look, the typical thing that's going to happen, and it's already been happening, is everyone is going to come along with this idea--the value added tax, this thing under $250,000, Social Security, Medicare changes, what have you--and you're looking for us to say no, yes, no, yes, no yes--which will mean that the commission has absolutely nothing to talk about and nothing to do. The president has been very clear that we're not going to play that game."

Commission member Jeb Hensarling, a member of the tax-writing House Ways and Means Committee and a Republican congressman from Texas, told me this morning that Orszag refusal to reiterate the president's commitment is a new wrinkle in the debate--and will likely become "a huge issue" in the 2010 midterm elections.

Orzag appeared to be saying that the Obama Administration wasn't going to take anything off the table for the consideration of the National Commission on Fiscal Responsibility and Reform. Why have a commission if its members can't come up with a full menu of options for policymakers to consider? he seemed to be saying.

But in saying that, he clearly left open the door to Republican charges that the president intends to raise taxes on the middle class as defined by those who make less than $250,000, even if that's not true.

It puts the White House in something of a tight spot. Leave everything on the table, including higher taxes on the middle class, and the president will be vulnerable to charges of flip flopping on a campaign promise.

But if the president and his team forcefully stick with the pledge, than it does greatly reduce the commission's options for raising the revenue needed to cut federal deficits.