TEXT OF STORY
Kai Ryssdal: If you happened to watch the Sunday talk shows this past weekend, you saw a classic example of a favorite Washington political tactic. The trial balloon. Key members of the White House economic team seemed to suggest the president would be open to raising taxes to control the deficit. That would be politically challenging for the president. Because back during the campaign, candidate Obama said, and frequently, too, that he wouldn’t raise taxes on people making up to $250,000 a year. The White House spent most of Monday trying to pop that trial balloon. Commentator Lawrence Haas says they ought to just own up to it.
LAWRENCE HAAS: Let me end the suspense. After the economy recovers, President Obama will raise taxes on middle-class Americans. He has to. He simply can’t fulfill his no-tax pledge and govern effectively.
We are bleeding red ink like never before. We’re running the largest budget deficits in our history, and our lenders, like China, may not keep buying our debt. They’re already nervous that we’ll just print more money to pay our bills. That will cause inflation to rise and their investments to shrink in value.
At some point, our investors may go elsewhere. We would then have to raise our interest rates to entice other countries to lend to us. That would threaten our economic recovery, and that’s something the president wants to avoid.
We can’t cut our deficit enough without raising taxes. What’s mainly driving our deficit is the growth of Medicare, Medicaid, and Social Security. And Americans won’t support big enough cuts in those programs alone to reduce the deficit.
And we can’t raise taxes just on the rich to stem the red ink. There aren’t enough rich people.
Besides, forget the deficit for a minute. We can’t even do the things we need to do, like provide health care for all Americans, without raising taxes on the middle class.
That’s why Congress is stalled on health reform. They don’t want to raise taxes on middle-class Americans, but they may have to.
Obama is learning a hard lesson: don’t make tax promises that you can’t keep. It helps you get elected, but it makes it much harder to govern.
Presidents Reagan, Clinton, and the first Bush all faced rising deficits, and all raised taxes after promising not to. Obama will be no different. He’ll raise taxes because, frankly, it’s the right thing to do.
RYSSDAL: Lawrence Haas was communication director of the White House Office of Management and Budget under President Clinton.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.