Obama Begins Public Campaign On Tax Standoff

by
staff
President Obama surrounded himself with taxpayers on Wednesday to pitch his plan to preserve current rates for the middle class and raise them for the wealthy. A day before, he met with small-business owners for the same purpose. On Friday, he plans to fly to Pennsylvania to tour a factory to make the same point.

President Obama spoke on Wednesday at an event at the White House with people who would see their taxes go up next year if Congress does not extend tax cuts for the middle class.

WASHINGTON — President Obama surrounded himself with taxpayers on Wednesday to pitch his plan to preserve current rates for the middle class and raise them for the wealthy. A day before, he met with small-business owners for the same purpose. On Friday, he plans to fly to Pennsylvania to tour a factory to make the same point.

As the president and Congress hurtle toward a reckoning on the highest federal budget deficit in generations, Mr. Obama says he wants a “balanced” approach to restoring the nation’s fiscal order. But the high-profile public campaign he has been waging in recent days has focused almost entirely on the tax side of the equation, with scant talk about his priorities when it comes to curbing spending.

Mr. Obama has embraced specific cuts to the federal budget in the past and has committed to an agreement with Congress that will include deep reductions in spending. But it would be easy for those who listen to his public pronouncements lately to miss it. In public statements since his re-election, he has barely discussed how he would pare back federal spending, focusing instead on the aspect of his plan that plays to his liberal base and involves all gain and no pain for 98 percent of taxpayers.

Republicans and even some Democrats have expressed frustration that Mr. Obama has avoided a serious public discussion on spending with barely a month until deep automatic budget cuts and tax increases are scheduled to take effect. While the president’s aides said it was important to engage the public on taxes, others say he has not prepared the country for the sacrifice that would come with lower spending.

“The problem is real,” said Erskine B. Bowles, who was co-chairman of Mr. Obama’s deficit reduction commission. “The solutions are painful, and there’s not going to be an easy way out of this.”

After meeting with White House officials this week, Mr. Bowles said he believed “they were serious about reducing spending” but added that “we need to talk more about the spending side of the equation.”

Republican leaders were more scathing, saying the president was more interested in campaigning than sitting down to resolve difficult issues. They said they were willing to raise tax revenue by closing loopholes and limiting deductions, but Mr. Obama has not reciprocated with more restraint of entitlement programs.

“We have not seen any good-faith effort on the part of this administration to talk about the real problem that we’re trying to fix,” said Representative Eric Cantor of Virginia, the House majority leader. “This has to be a part of this agreement or else we just continue to dig the hole deeper, asking folks to allow us to kick the can down the road further. And that we don’t want to do.”

Although Mr. Obama has not scheduled a new meeting with Congressional leaders, he will dispatch top advisers to Capitol Hill for talks on Thursday. Treasury Secretary Timothy F. Geithner and Rob Nabors, the White House legislative director, will pay separate visits to Senators Harry Reid of Nevada and Mitch McConnell of Kentucky, the Democratic and Republican leaders, and Representatives John A. Boehner of Ohio and Nancy Pelosi of California, the Republican speaker and Democratic minority leader.

Mr. Obama met privately on Wednesday with the chief executives of 14 major corporations like Goldman Sachs, Home Depot, Marriott, Coca-Cola, Pfizer and Yahoo to discuss the fiscal situation.

“He seemed flexible, but he said taxes should go up on the top 2 percent,” said one executive who did not want to be named. Most of the executives said they were not opposed to tax increases as part of a deal but stressed that a quick resolution could help the economy.

White House officials rejected Republican suggestions that Mr. Obama has not been serious enough about tackling the growth of entitlement spending. “He is committed, every time he talk about this, to a balanced approach that includes both, you know, revenues, spending cuts and savings through entitlement reforms,” said Jay Carney, the White House press secretary.

White House officials pointed to $340 billion in health care entitlement program savings and $272 billion in reductions to other mandatory programs over 10 years in a previous presidential budget proposal. “Even though that budget proposal’s been out there for a long time, a lot of people aren’t aware of that,” Mr. Carney said. “ He called it “another piece of evidence that the president has been willing to make tough choices.”

One reason a lot of people may not be aware of the cuts Mr. Obama has proposed is because he does not talk about them often. In his first postelection news conference, he focused on tax increases on the wealthy and used the term “spending cuts” just once without elaborating.

By focusing on taxes, Mr. Obama has put Republicans on the defensive. At Wednesday’s event, he challenged them to extend Bush-era tax cuts for family income under $250,000 since both sides agree those should continue. Doing so would effectively mean tax cuts on income over $250,000 would expire at the end of the year since Mr. Obama would not sign a separate bill extending them.

The president’s public lobbying seemed to crack through the solid Republican opposition this week when a prominent conservative, Representative Tom Cole of Oklahoma, urged his party to seek such a quick deal with Mr. Obama extending middle-class tax cuts. Mr. Boehner pushed back against Mr. Cole on Wednesday, saying that would hurt small businesses and the economy.

At the same time, Mr. Obama evidently sees no percentage in talking in detail about spending cuts, acutely aware that his liberal base is unenthusiastic about paring back entitlement programs. Senator Richard J. Durbin, a longtime Illinois ally and the No. 2 Senate Democrat, said this week that Medicare, Medicaid and Social Security should not be part of current budget talks.

As the two sides continued to shadowbox, Mr. Bowles was skeptical, putting the chances of a deal by the end of the year at one in three. “I believe the probability is that we are going over the cliff,” he said, “and I think that will be horrible.”