President Barack Obama, in a speech in the Rose Garden this morning, reiterated his belief that taxes must increase on "millionaires and billionaires" in the supercommittee's deficit reduction agreement. "Now, we’re already hearing the usual defenders of these kinds of loopholes saying this is just 'class warfare,'" Obama said. "I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare. I think it’s just the right the thing to do."
The president laid out two choices: impose higher taxes on wealthier Americans or suffer consequences like "second-rate" infrastructure and schools. "The money is going to have to come from someplace," Obama said. "And if we’re not willing to ask those who've done extraordinarily well to help America close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more. We’ve got to put the entire burden on the middle class and the poor. We’ve got to scale back on the investments that have always helped our economy grow. We’ve got to settle for second-rate roads and second-rate bridges and second-rate airports, and schools that are crumbling."
The response from Obama's left has been mostly positive, as Ben Smith points out. MoveOn.org said in a statement it is "glad" the White House has listened to the left on raising taxes on the wealthy. The center-left Democrat Mark Penn, however, criticized Obama for "careening down the wrong path toward re-election."
The president's speech was roundly criticized by conservatives, too, for its tax hikes. Speaker of the House John Boehner, whom Obama said believes in a "my way or the highway" approach to deficit reduction, responded in a statement by saying that "pitting one group of Americans against another is not leadership." He strongly rejected the president's tax proposal. "This administration’s insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously, and it is evident today that these barriers remain," Boehner said.
House Budget chairman Paul Ryan, who called the speech "disappointing, but not surprising," said in a release today that the president's proposal for a "$1.6 trillion tax hike" is "never a good idea."
"[T]aking more money from private savers and investors, and giving it to the same government bureaucrats who brought us the Solyndra debacle, is an even worse idea – especially in a weak economy," Ryan said. "Unfortunately, none of the President’s proposals this year – from his April budget speech, to his recommendations today – offer a credible plan to lift our crushing burden of debt while restoring economic growth. Instead of renewed prosperity, the President has offered us a plan for shared scarcity. The nation deserves better.”
In his speech, Obama also took aim at those members of Congress who have taken anti-tax hike pledges, like that of Americans for Tax Reform (ATR). "Anybody who says we can’t change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out," Obama said. "They should have to defend that unfairness...if they’re pledged to keep that kind of unfairness in place, they should remember, the last time I checked the only pledge that really matters is the pledge we take to uphold the Constitution."
In a phone interview, ATR president Grover Norquist called the speech "dishonest" and a "hissy fit." "His speech was the death knell of serious tax reform between now and the 2012 election," he said. Norquist insisted there was nothing in his pledge that bars a pledged member of Congress from voting to close tax loopholes; in fact, he said, the pledge was "specifically designed to eliminate tax loopholes." (The claim that the ATR pledge prevents closing loopholes is one even FactCheck.org, by no means a conservative organization, has thoroughly debunked.) The crux of the disagreement, Norquist said, was that Republicans believe closing the loopholes should be revenue neutral, while Obama and the Democrats see this has an opportunity to raise taxes.