An Associated Press study released today indicates that tax receipts are on pace to drop 18 percent this year -- the biggest drop since the Great Depression. Individual income tax receipts are down 22 percent and corporate income taxes down 57 percent from last year.
And while Obama repeatedly talks about raising taxes on top wage-earners, Altman suggests that wont be enough. "The size of the problem is so big, you can't address it by just addressing a tiny slice at the top," Altman said.
"The deficits we are facing could cause much higher interest rates and those interest rates in turn will stifile economic growth, so you would end up with fewer jobs and lesser personal income that you would have without the deficit," Altman said. "In the long run, they reduce standards of living."
One thing the president's economic team agrees on is that the economy has a long way to go before full recovery. White House Council of Economic Advisers chairwoman Christine Romer said on CNN's "State of the Union" that it was going to be a "long, hard slog."
With new unemployment numbers expected to show an increase later this week, and debate on health care reform expected to continue well into the year, increasing middle-class taxes could be a tough sell.
But for now, the president continues to argue that the way to revitalize the economy is to control health care costs and to let the stimulus package run its course.