Continuing their full-scale push to build support for President Obama’s tax and spending compromise, top White House officials went before a roomful of reporters this afternoon for an off-camera session to defend the plan.
White House senior adviser David Axelrod – fresh from appearances on most of the broadcast and cable morning shows Wednesday – was joined by economic adviser Lawrence Summers and press secretary Robert Gibbs. Their message: the president’s agreement with congressional Republicans to maintain tax cuts for all – including the wealthiest – is a better deal for low and moderate income earners than it is given credit for and is likely to give the economy the “takeoff velocity” it needs to accelerate a recovery.
Summers noted that modeling by independent economists shows the plan will increase the economic growth rate by at least one percent and create at an estimated one million new jobs. That, Summers said, actually will reduce federal deficit long term despite the nearly one-trillion-dollar cost of the income tax cuts, reductions in the payroll tax, new unemployment compensation, and other spending in the compromise.
“It does, however, change in a very important way the economic picture as most observers would have judged it even two weeks ago,” Summers said. And conversely, he warned, “failure to pass this bill in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip (recession).”
Some Democrats have attacked the compromise not only because it violated the president’s pledge not to extend tax cuts for the wealthy, but for giving too generous estate tax relief to the very wealthiest.
Summers noted however that tax refunds to the working poor, college tuition credits, and child deductions for low-wage earners amount to twice as much relief as was granted in the estate tax compromise.
The officials said they hoped Congress will act quickly to pass the plan essentially as is despite widespread grumbling among Democrats. On that score Gibbs said: “If somebody can figure out how to change this thing and keep everybody happy … I don’t doubt that anybody on Capitol Hill or here would listen. I will say that’s not going to be an easy thing to do.”
Find more coverage of the tax cut debate on our Politics page.