President Obama reached out to an increasingly dissatisfied Democratic base on Monday by threatening to veto any deficit-reduction plan that does not include higher taxes on the wealthy, defying congressional Republicans who pledged to oppose tax increases of any kind.
Liberal groups dutifully applauded the president’s ultimatum, part of the president’s plan to reduce the U.S. budget deficit by $3 trillion over 10 years.
“For months, [we] have been urging Washington to focus on creating jobs and making our tax system work for all Americans, not just the super rich,” said Daniel Mintz, campaign director at MoveOn.org. “Today, we’re glad to see this message reach the White House.”
Treasury Secretary Timothy Geithner characterized Obama’s deficit-reduction proposal, including its $1.5 trillion in new taxes, as a “modest change in revenues.” But Republicans blasted it as job-killing “class warfare.”
“When you pick one area of the economy and you say, ‘We’re going to tax those people because most people are not those people,’ that’s class warfare,” Sen. Lindsey Graham, R-S.C., said on CNN.
Obama is urging lawmakers to require those earning $1 million a year to pay a higher tax rate than the middle class, a proposal he credited to billionaire Warren Buffett.
White House officials say the plan ensures that everyone will “pay their fair share.”
“This is not class warfare,” Obama said from the Rose Garden. “It’s math.”
Obama’s plan also would end tax breaks for individuals making more than $200,000 a year and families making more than $250,000 a year, limit deductions for mortgage interest and charitable donations, and end tax subsidies for oil companies, corporate jet owners and investment fund managers.
Badly needing to boost his standing among his core supporters — who have been urging Obama for months to take a harder line against Republicans — the president also offered a pared-down reform plan for Medicare and Medicaid. But he excluded from his plan a Republican-backed proposal to raise the Medicare eligibility age from 65 to 67.
Obama supported raising the eligibility age during earlier deficit and budget negotiations with House Speaker John Boehner, R-Ohio. But those negotiations crumbled in early August and since then Obama’s approval ratings among Democrats have sunk to new lows.
“Obviously, over the summer, we were in a different context,” White House Budget Director Jack Lew said, explaining Obama’s shift. “When it became clear that there was no willingness on the other side to embrace a balanced approach with revenue, then we went back to put together a plan that reflects our view of how to do it.”
Senate Minority Leader Mitch McConnell, R-Ky., characterized Obama’s veto threat as a political stunt and criticized him for going soft on entitlement reform.
“Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth — or even meaningful deficit reduction,” he said.
White House officials insisted that Obama’s plan isn’t a political move.
“I think when it comes to accusations of political posturing, some folks ought to look in the mirror,” White House press secretary Jay Carney said.
