In his last appearance on This Week, Treasury Secretary Tim Geithner seemed to open the door to future tax increases when he said that President Obama would do "whatever it takes" to deal with long-term deficits — even if that meant going back on his campaign pledge not to raise taxes on those making less than $250,000 a year.
He was responding to Roger Altman's argument that moving to a VAT is all but inevitable over time — an opinion seconded by Alan Greenspan.
Now, the Obama Administration's go-to outside guy — John Podesta of the Center for American Progress — is weighing in on their side. In his new report, "Deal With It," he makes the progressive case for a middle class tax increase: "those who believe that government investments and spending are central to our economic and social well-being and favor progressive taxation recognize that tax increases on the wealthiest and corporations are not going to solve the whole problem."
Hardly ideal timing for the White House. But a CAP official tells me: "Our role is to mine the tough political/policy minefields ahead of the pols — maybe step on a landmine or two that helps them deal with this in the long run."
The big question: how much time does Obama have?
No way the White House can put new taxes on next year's agenda — not after health care and before the midterms. George H.W. Bush showed what happens to a President who breaks a core tax pledge heading into his own re-election fight. But will the Chinese and other US creditors force the issue?
- George Stephanopoulos