The Note, 2/26/09: Taxing Tasks — Big new plans, and a very mixed message from Obama

By Caitlin Taylor

Feb 26, 2009 8:24am

By RICK KLEIN That fiscal discipline thing was fun while it lasted, wasn’t it? There’s nothing quite like reinforcing a message of restraint by bracketing it with a $787 billion stimulus package, a $410 billion omnibus budget, and a $634 billion healthcare fund. With Thursday’s budget rollout, the odometer ticks toward $2 trillion. Whatever savings he outlines, we can just about roll away President Obama’s hopes of establishing himself as the guardian of the taxpayer dollar, at least for now. Here come all the ideas, all at once — from a president who’s trying to deliver as broadly and deeply as he promised. The obstacles here are multiple — on fronts political, fiscal, and PR. This is the president’s bold new vision, but it’s also a cold old portrait of taxing and spending that he’s got to be able to defend. Will trying to do everything at once make it more likely that everything gets done, or that nothing gets done? Where’s the message there — and here? Team Obama may not mind this image, but then again maybe it should: Obama’s budget plan represents “a pronounced move to redistribute wealth by reimposing a larger share of the tax burden on corporations and the most affluent taxpayers,” Jackie Calmes and Robert Pear report in The New York Times. “President Obama will propose further tax increases on the affluent to help pay for his promise to make health care more accessible and affordable,” they write. “The tax proposal, coming after recent years in which wealth has become more concentrated at the top of the income scale, introduces a politically volatile edge to the Congressional debate over Mr. Obama’s domestic priorities.” Anyone want to guess what gets more attention Thursday — healthcare or taxes? “The tax increases would raise an estimated $318 billion over 10 years by reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets,” Laura Meckler writes in The Wall Street Journal. “One concern certain to get attention in Congress: whether a change to the deductions formula would discourage charitable giving among the wealthy, or further depress the housing market given that the interest deduction would fall for some.” “President Barack Obama will propose the first tax increase on high-income earners in 16 years to help pay for sweeping health-care reforms,” Bloomberg’s Ryan Donmoyer and Aliza Marcus report.  While we’re reading lips: “To partially fund the Health Care Reserve Fund, another new source of revenue — or tax hike — the President will propose applying the same income standard for premiums for Medicare Part D (prescription drugs) that applies already to Medicare Part B (doctors’ visits),” ABC’s Jake Tapper reports. And don’t say the Obama idea factory isn’t churning: “Some people within the administration are arguing that that . . . the government needs to bombard people with examples of what’s being done right — like holding big rallies for all the schoolteachers whose jobs are saved by the stimulus,” Gail Collins reports in her New York Times column. “Or — and I swear to you this is a real idea — inventing a kind of stimulus logo, like the old National Recovery Administration blue eagle, that could be posted on every federally funded project, as one official explained, ‘to show the public exactly what we’re doing.’ ” The budget rollout includes 9:30 am ET presidential remarks, with multiple briefings to follow, and all manner of response from Capitol Hill and beyond. Anyone want to guess what this does for GOP messaging? “From everything I’ve seen, it looks like the era of big government spending is back,” House Minority Leader John Boehner, R-Ohio, said at a Christian Science Monitor lunch Wednesday.  Think Newt is smiling? Mr. Gingrich is “The Anti-Obama,” per Matt Bai’s forthcoming New York Times Magazine cover story. In it find seeds of the GOP’s version of triangulation — playing the president off of congressional leaders. “I don’t actually build oppositions,” Gingrich tells Bai. “I build the next governing majority. I have no interest in being an opposition party.” Great timing for CPAC. The Conservative Political Action Committee’s Washington meeting starts Thursday — and here’s guessing speakers like Rep. Paul Ryan, Rep. Mike Pence, and former Gov. Mike Huckabee have a theme or two they can agree on. Bill Kristol rallies the troops: “Obama’s speech reminds of Ronald Reagan’s in 1981 in its intention to reshape the American political landscape. But of course Obama wishes to undo the Reagan agenda,” he writes in his Washington Post column.  Eyes wide open, at least: “The president will convene a summit on health care reform next week to begin to tackle the issue and is under no illusions that the path for such legislation will be difficult on Capitol Hill, his spokesman said today,” per ABC’s Jake Tapper and Karen Travers report. “Obama will turn over health care reform to Congress — unlike the Clinton White House’s attempt in 1993 when then-first lady Hillary Clinton kept it at 1600 Pennsylvania Ave.”  Backing up the case: Sen. Max Baucus, D-Mont., and Sen. Ted Kennedy, D-Mass., in a Wall Street Journal op-ed. “Some argue that repairing the health-care system now is impossible, given the urgency and high cost of ending the financial crisis. The claim is that we can fix one problem or the other — but not both. In truth, the two are inextricably intertwined: Solving the nation’s health-care crisis is a fundamental part of healing our economy.”  As for halving the deficit: “First, many methods he says he will use have fallen short in the past — cutting waste, imposing new budget rules, curbing defense outlays and raising taxes on the affluent. Second and potentially harder to overcome is fresh evidence that, for all the talk of fiscal responsibility, Congress is not ready to mend its free-spending ways,” The Los Angeles Times’ Janet Hook and Peter Nicholas report. It’s all on the table: “The size of the gambles that President Obama is taking every day is simply staggering,” David Broder writes in his Washington Post column. “What came through in his speech to a joint session of Congress and a national television audience Tuesday night was a dramatic reminder of the unbelievable stakes he has placed on the table in his first month in office, putting at risk the future well-being of the country and the Democratic Party’s control of Washington.”  “Obama must engage in a perilous balancing act. On one hand, he needs to reassure investors and make the case that his $787 billion spending bill is turning the economy around,” Fortune’s Nina Easton writes. “On the other hand, Obama has a breathlessly ambitious agenda, much of which he wants to enact this year — sweeping health care reform, doubling the nation’s use of renewable energy, creating a ‘retooled and reimagined’ auto industry, raising everyone’s education levels, halving of the nation’s deficit, entitlement reform — and, yes, finding a ‘cure for cancer in our time.’ “  Reality watch: “Many Democrats have expressed trepidation about the lofty expectations that Obama has set and are keenly aware that the party could pay a steep price in,” The Washington Post’s Shailagh Murray and Paul Kane report.  Gimmick watch: “It identifies $634 billion in tax increases and spending cuts to cover the cost of part of the [healthcare] program, but does not say how the administration hopes to raise the rest of the money — hundreds of billions of dollars more. ‘TBD’ has been penciled into categories for cost savings and benefit reductions,” Lori Montgomery writes in The Washington Post. “And though Obama told Congress on Tuesday that his budget team has ‘already identified $2 trillion in savings’ to help tame record budget deficits, about half of those ‘savings’ are actually tax increases, administration officials said. A big chunk of the rest of the savings comes from measuring Obama’s plans against an unrealistic scenario in which the Iraq war continues to suck up $170 billion a year forever.”  And don’t forget the transition site: “On his Presidential Transition website, President Obama said he would ‘pay for his $50 – $65 billion health care reform effort by rolling back the Bush tax cuts for Americans earning more than $250,000 per year and retaining the estate tax at its 2009 level,’ ” per ABC’s Jake Tapper. “But as we learned yesterday afternoon, though the President is certainly planning on raising taxes on the wealthiest Americans by allowing the Bush tax cuts to expire next year — making the top rate jump from 35% to 39.6% — the President plans on partially funding the Health Care Reserve fund by raising another, new tax on those families making $250,000 a year, specifically from reducing the itemized deduction rate for families with incomes over $250,000, limiting it to 28 percent. . . . This new tax is certainly consistent with President Obama’s campaign rhetoric of asking wealthier Americans to pay more, but it’s also, at least to my ears, new.” Then there’s the omnibus. The story that’s always easy to tell: “Buckets of taxpayers’ cash — adding up to nearly $8 billion — are due to shower over thousands of projects, including many that appear to have little promise of creating jobs or reducing the national debt,” James Gordon Meek writes for the New York Daily News. “There’s $190,000 set aside in the House’s version of the federal budget for bringing Cody, Wyo.’s Buffalo Bill Historical Center into the digital age, watchdog group Taxpayers for Common Sense found. Some may also wonder if $238,000 for educational programs at Honolulu’s Polynesian Voyaging Society is a national priority – an item sponsored by a Democratic senator.”  An instant classic: “Among the pet projects is one to help producers of genuine pork, in contrast to the Congressional variety. The bill includes $1.8 million to conduct research in Iowa on ‘swine odor and manure management,’ ” Robert Pear reports in The New York Times.  “Business as usual,” reads the headline on the front page of The Boston Globe. “The earmarks were inserted despite President Obama’s statement in his speech Tuesday night to Congress that he was ‘proud’ there wasn’t a single earmark in the separate $787 billion stimulus plan and the possibility that he might veto legislation loaded with pet projects,” the Globe’s Michael Kranish reports. Wait — he inherited this, too? “What may be next week’s bill is last year’s legislation,” White House Press Secretary Robert Gibbs said.  “It may seem yet another example of Washington hypocrisy, but the Obama Administration insists there is no contradiction between its words and actions,” Time’s Jay Newton-Small and Michael Scherer report.  But the president can’t be all happy: “According to a knowledgeable source, Obama pressed the lawmakers to keep earmarks out of spending bills but was resisted,” Roll Call’s Keith Koffler writes. “Democratic leaders defended the practice, insisting that it was Members’ constitutional right to insert them on behalf of constituents’ projects that they deemed worthy, that Congress had markedly reduced the practice and that earmarks represented 1 percent of spending.”  (Even if you take away the earmarks — does Obama want to be signing a bill that raises domestic spending another 8 percent? Wasn’t the short-term stimulus supposed to be in the, um, stimulus bill?) Lovely timing: “The day after President Barack Obama told Congress that it would have to ‘sacrifice some worthy priorities for which there are no dollars,’ the House of Representatives passed a massive budget bill Wednesday that increases spending by 8 percent over last year,” McClatchy’s David Lightman writes.  Unpacking the policy: “Democrats, freed from former President George W. Bush’s veto threats, are gutting the previous administration’s programs with funding cuts and policy changes in the omnibus spending bill that the House passed Wednesday,” S.A. Miller reports in the Washington Times.  Still — a worry on the other side? “16 members broke from the party line on a vote Minority Whip Eric Cantor had urged his colleagues to reject. And the cracks in the facade appear to be the first public signal of Republican rank-and-file squeamishness with a remarkably high-risk strategy that promises an uncertain return,” Politico’s Charles Mahtesian and Patrick O’Connor report. “For Republicans, a central question looms: Is saying no to Obama’s agenda the way to get voters to say yes to an already beleaguered GOP brand?”  Holding the line — and holding out: “He was elected with an awful lot of hope on the part of voters that he was actually going to do things in a different way,” Cantor, R-Va., tells ABC News.  An astounding few sentences from Karl Rove, on several levels, in an attack on the president’s use of “straw men” in arguments: “Mr. Obama portrays himself as a nonideological, bipartisan voice of reason. Everyone resorts to straw men occasionally, but Mr. Obama’s persistent use of the device is troubling. Continually characterizing those who disagree with you in a fundamentally dishonest way can be the sign of a person who lacks confidence in the merits of his ideas,” he writes in The Wall Street Journal.  (Remind us again of who said this: “Republicans have a post-9/11 worldview and many Democrats have a pre-9/11 worldview.”)  Former President Bill Clinton was a fan of Obama’s Tuesday speech: “I think he drew the right balance — he didn’t sugarcoat anything, he didn’t say it’s gonna get better tomorrow,” he tells The Washington Post’s Greg Sargent.  A different cut on discipline: ABC’s Teddy Davis reports that a handful of powerful liberal groups are putting Democratic officeholders on notice Thursday that they will challenge congressional incumbents who become “more responsive to corporate America than to their constituents.”

The new political action committee is called “Accountability Now PAC.” It is being led by Markos Moulitsas of DailyKos, the Service Employees International Union, and MoveOn.org.  Other groups supporting Accountability Now include: Color of Change, 21st Century Democrats, BlogPAC, and Democracy for America . 

ABC’s Jonathan Karl on Thursday grabs the first post-White House interview with Laura Bush. The first piece will air on “World News with Charles Gibson,” with much more to come on “Good Morning America” Friday.  What’s holding up HHS? “A senior Obama administration official tells The Brody File that concerns voiced by pro-life groups about potential HHS Secretary Nominee Kathleen Sebelius have come up in high level White House discussions but it has not disqualified her from the job,” David Brody reports. “Pro-life groups believe Sebelius’s connection to Kansas late term abortionist George Tiller is a major problem.” ABC’s John Hendren explores the audacity of informality: “Dancing a few steps to pander to the middle-American viewers of ‘Ellen’ during the campaign was one thing, but bare arms and Oprah-esque phrases like ‘I get it’ during a congressional address are quite another. What’s next? White House casual Fridays?:  The Kicker: “Do you know the website number?” — Vice President Joe Biden, trying to dial up Recovery.gov.  “When I was growing up, the priests taught us to think that was a sin.” — Sen. John Kerry, asked by Politico’s Patrick Gavin how often he Googles himself.  Bookmark the link below to get The Note’s daily morning analysis:
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