Obama Administration: Extend Tax Cuts For Families Earning Less Than $250,000 Annually

White House: “The President Believes We Must End The Tax Rates For The Wealthiest Americans.” In a blog post on the White House website, the Obama administration outlined its commitment to making the tax cuts permanent only for households earning less than $250,000 a year:

Recently there's been renewed debate about whether Republicans will stick by their insistence on holding the middle class tax cuts that are scheduled to expire at the end of the year hostage so that they can continue big tax cuts the wealthiest 2 percent of individuals. The President believes we must end the tax rates for the wealthiest Americans and make them permanent for every family bringing in less than $250,000 a year. [WhiteHouse.gov, 6/6/12]

Clinton: Tax Cuts Should Not Be Permanently Extended For High-Income Earners

Clinton: “I Don't Think The President Should” Extend Tax Cuts For Upper Income Earners. In an interview with CNBC's Maria Bartiromo, Clinton stated:

CLINTON: [W]hat I think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what's necessary in the long-term debt reduction plan as soon as they can, which presumably will be after the election.

BARTIROMO: So does that mean extending the tax cuts?

CLINTON: Well, I think what it means is they will have to extend -- they will probably have to put everything off until early next year That's probably the best thing to do right now. But the Republicans don't want to do that unless he agrees to extend the tax cuts permanently, including for upper income people.

And I don't think the president should do that. That's going to be -- that's what they're fighting about. I don't have any problem with extending all of it now, including the current spending level.

[...]

CLINTON: The real issue is not whether they should be extended for another few months; the real issue is whether the price the Republican House will put on that extension is the permanent extension of the tax cuts, which I think is an error. [CNBC, Closing Bell, 6/5/12]

Clinton Spokesperson: Clinton “Does Not Believe The Tax Cuts For The Wealthiest Americans Should Be Extended Again.” After media reports misconstrued Clinton's comments, spokesperson Matt McKenne said in a statement:

Two questions have been raised regarding President Clinton's interview on CNBC today. First, on extending the Bush tax cuts, as President Clinton has said many times before, he supported extending all of the cuts in 2010 as part of the budget agreement, but does not believe the tax cuts for the wealthiest Americans should be extended again.

In the interview, he simply said that he doubted that a long-term agreement on spending cuts and revenues would be reached until after the election. [CNBC.com, 6/5/12]

TPM: Clinton's Comments Could Be Construed As A Conflict “If You Squinted And Cocked Your Head Just So.” Talking Points Memo's Brian Beutler addressed the alleged rift between Clinton and Obama, dubbing it “the manufactured story of the week.” Beutler went on to write that Clinton's words could only be construed as a conflict “if you squinted and cocked your head just so.” He continued:

Of course, Republicans would like to force Democrats to permanently extend all of the Bush tax cuts before they expire, and to accomplish that they may threaten to let them all lapse, just like they did in 2010. But that's a question of strategy, not policy, and whether that happens in January or March is sort of beside the substantive point.

Clinton's saying the smart thing for Congress to do would be to buy time to avoid the entire fiscal cliff in a considered, rational way. That's actually a consensus view. The fact that Democrats think it's the wisest course of action doesn't suggest they're breaking with the White House on the Bush tax cuts any more than Paul Ryan supports current spending on domestic programs.

It's all pretty straightforward, but you'd never know it from the coverage. Instead we have yet another story about Bill Clinton undercutting Obama's message and strategy. [Talking Points Memo, 6/6/12]

Summers Endorsed Asking Wealthy “To Do Their Fair Share”

Summers: “To Control The Deficit,” “You Gotta Look At The People Who've Gotten The Most Gains From The Economy.” In an interview on MSNBC's Morning Joe, economist and former adviser to President Obama said that in the long term, Americans who had benefitted most from the economy in the last 30 years would need to “do their fair share” to reduce deficits:

MIKA BRZEZINSKI (co-host): Larry Summers, let's start with you. You heard Bill Clinton talking about the tax cuts. We had terrible unemployment numbers coming out last week. What would you advise the president to do at this point?

SUMMERS: Look, the real risk to this economy is on the side of slowdowns, certainly not on the side of overheating. And that means we've got to make sure that we don't take the gasoline out of the tank at the end of this year. That's got to be the top priority. We've got to make sure that we keep providing energy to the economy.

And the areas where we've done that, like manufacturing with the support for the automobile industry, we haven't had great results but we've had much better results. In the areas where we weren't able to do what we wanted to do, areas like preserving jobs for teachers, areas like construction and investment and maintenance of the country's infrastructure, you look at the employment report, and we've really got terrible results.

So the key priority has got to be, for the short run, making sure there's the energy to keep the economy growing 'cause we're not going to do anything about the deficit unless we do that.

And then for the medium term, we obviously -- meaning the long term, we've obviously gotta do things to control the deficit. And certainly if you look at where we need to look to do that, as the president also -- President Clinton also recognized in his comments last night -- you gotta look to the people who've gotten the most gains from the economy over the last 30 years -

BRZEZINSKI: Yeah.

SUMMERS: -- and who've also gotten the biggest tax reductions. And that's the group that's been -- the group's that's been most fortunate. It's not taking from them; it's simply asking them to do their fair share at a time when the country's got to pull together to work through some difficult problems. [MSNBC, Morning Joe, 6/6/12, via Media Matters]

Summers Later Reiterated That He “Fully Support[s] President Obama's Position On Tax Cuts.” In a statement issued in response to the inaccurate media reporting following his Morning Joe appearance, Summers confirmed: “I fully support President Obama's position on tax cuts. I have often said and continue to believe that promoting demand is the most critical short run priority for the American economy. Extending the high income tax cut does little for demand and poses substantial problems of fairness and fiscal prudence.” [The Huffington Post, 6/6/12]

Wall Street Journal: Summers “Didn't Say” That He Favored Extending Bush Tax Cuts. Following its initial story on Summers' comments in which it reported that “Mr. Summers specifically called for an extension of the Bush-era tax cuts,” the Wall Street Journal issued a correction, writing:

An earlier version of this blog post and its headline incorrectly said that Mr. Summers specifically called for an extension of the Bush-era tax cuts. A review of the transcript shows he didn't say that. [The Wall Street Journal, 6/6/12]

NY Times: “Mr. Summers Did Not Explicitly Endorse An Extension” Of The Bush Tax Cuts. A New York Times article on Summers' comments also claimed that he had endorsed extending the Bush-era tax cuts for wealthy households, then was later revised with the following correction:

An earlier version of this article overstated comments Lawrence Summers, one of President Obama's closest economic advisers, made on Wednesday when asked whether the Bush-era tax cuts should be extended. While he did not take the idea off the table -- saying that growth should be “the top priority” -- Mr. Summers did not explicitly endorse an extension. [The New York Times, 6/6/12]

New York's Jonathan Chait: “Obama, Clinton, And Summers All Want To End The Bush Tax Cuts For The Rich.” Discussing the perceived conflicts between Summers' and Clinton's comments and Obama's position on tax cuts, New York magazine's Jonathan Chait wrote: “In fact, Obama, Clinton, and Summers are all in total agreement on the economics, though slightly in disagreement on the politics, and Obama's political disagreement with Clinton places him to Clinton's right.” Chait continued:

Obama, Clinton, and Summers all want to end the Bush tax cuts for the rich, pass a long-term plan to reduce the deficit, and also pass a short-term plan to goose consumer demand.

The catch is that Obama can't get Republicans on any of this. Republicans only support long-term proposals to reduce deficits if they consist entirely of spending cuts and are paired with cuts to income tax rates. They're willing to support short-term plans to increase the deficit only if paired with extensions of upper-bracket tax cuts. Since Obama believes long-term deficit reduction must include higher tax revenue collected from the rich, the two sides are at a total stalemate.

At the end of 2010, the Bush tax cuts were set to expire, and Republicans cut a deal. They agreed to support extending middle-class tax cuts and unemployment assistance, which Democrats wanted, in return for extending tax cuts for the rich, which they wanted. If Democrats didn't agree to extend the tax cuts for the rich, Republicans would have let the other stuff expire, and the middle-class tax hike and cutoff of unemployment benefits would have taken a bite out of consumer incomes and slowed down the economy. At the end of the year, all those things expire again. [New York, 6/6/12]

But According To Fox, Clinton And Summers Were “At Odds” With Obama

Anchor Martha MacCallum: Clinton's Timing “Is At Odds With What The President Has Said.” Fox anchor Martha MacCallum claimed that Clinton's position was “at odds” with Obama's:

MacCALLUM: Well, Bill Clinton also said that extending all the Bush tax cuts until next year would be, quote, “the best thing to do.” And that timing is at odds with what the president has said. [Fox News, America's Newsroom, 6/6/12]

Host Neil Cavuto: “Forget The Guy Named Mitt, Could The Guy Named Bill Actually Be The President's Biggest Challenge?” Fox's Neil Cavuto distorted President Clinton's comments to suggest that he could actually be President Obama's “biggest challenge”:

CAVUTO: Well, forget the guy named Mitt, could the guy named Bill actually be the president's biggest challenge? Former President Bill Clinton now saying he was never for a temporary extension of all the Bush tax cuts, just for those who are not rich.

But here's actually what he said, and I'm quoting here, that “they will have to extend” -- he's referring to the Bush tax cuts -- “they will probably have to put everything off until early next year. That's probably the best thing to do right now.”

See “put everything off,” that to me reads all the tax rates. [Fox News, Your World with Neil Cavuto, 6/6/12]

Correspondent Ed Henry: Summers “Did Not Specifically Call For Extending [Tax Cuts], But Suggested Ending Them Could Further Stall The Recovery.” Fox chief White House correspondent Ed Henry reported:

HENRY: Another day, another clarification from a Democrat appearing at odds with President Obama on extending Bush tax cuts for the rich. Larry Summers did not specifically call for extending them, but suggested ending them could further stall the recovery. [Fox News, Special Report, 6/612 via Media Matters]

Host Sean Hannity: Clinton and Summers Both “Say We've Got To Extend The Bush Tax Cuts.” During an interview with Rep. Paul Ryan, Sean Hannity misrepresented Clinton's remarks on the Bush tax cuts:

HANNITY: What does it mean when Bill Clinton and Lawrence Summers, both of them come out and say that we've got to extend the Bush tax cuts? Clinton suggesting that we're basically in a recession right now, and then Summers also adding that the time for governments to borrow more money is right now. [Fox News, Hannity, 6/6/12]

Host Greta Van Susteren Misrepresented Clinton's Remarks, Suggested They Were “A Misstep.” Host Greta Van Susteren dedicated a segment of her program today to advancing the myth that Clinton favored extending the Bush tax cuts for the richest households:

VAN SUSTEREN: A misstep, off message, or deliberately going rogue? President Clinton's latest remarks about the economy, specifically the Bush tax cuts, are igniting a firestorm.

[...]

VAN SUSTEREN: Boy, it's dangerous to talk, isn't it?

BRIT HUME (senior analyst): Well, it's dangerous for the Obama campaign to have Bill Clinton out there talking, at least that's the way it's working out. [Fox News, On The Record, 6/6/12]