TAPPER: The president believes that he has a mandate to push for the increase on the top — on the taxes on the top 2 percent because he campaigned on it and because of polls. Is that a correct assessment? Or mainly because –
CARNEY: He believes – and I think most people would acknowledge — that the America people support that. He also believes that it’s the right thing to do as a matter of policy, as a matter of economic policy. We know from independent economists that tax cuts for middle-class Americans and, in the case that he wants to see passed, tax cuts for 98 percent of American taxpayers, are vastly more beneficial to the economy and economic growth than giving tax cuts to the wealthiest 2 percent; so as economic policy.
We also cannot afford tax cuts for the wealthiest 2 percent. That’s, you know, $950 billion over 10 years that we should not be spending in order to provide tax cuts to the folks who have enjoyed enormous tax cuts over the last 10 years as the middle class has been squeezed. So when it comes to balance, the president believes that, yes, it’s the right economic policy to let rates rise. It’s the only mathematically sound way to achieve balance in a — in a deficit reduction package. And it is supported by the American people.
TAPPER: Right, and as a political matter, the president campaigned on it repeatedly, right?
CARNEY: Well, I think that the point I’ve been trying to make is that he was very clear about this. So it should not be a surprise to Republican leaders, and it’s certainly not a surprise to the American people.
TAPPER: So my question is in this offer that the president made to House Republicans and Senate Republicans, he’s pushing for more than that, though. It’s not just the ones — the tax increases that he campaigned on; it’s other ones as well, $1.6 trillion.
CARNEY: The president spoke repeatedly during the year about his proposal that is enshrined in the 70-odd-page document that I had with me at the podium last week that was presented for the supercommittee’s consideration. The $1.6 trillion target of deficit — of deficit reduction through revenues has long been his position. It has been explicitly his position. We talked about it prior to the election. We talked about it in the immediate aftermath of the election. This is not — he did not — to suggest that he somehow added to his proposal is to pretend that –
TAPPER: I’m not saying he added to his proposal.
CARNEY: No, but –
TAPPER: But what I’m saying is he didn’t campaign on, for instance, limiting the mortgage deduction for wealthier Americans or limiting the charity deduction for wealthier Americans. Those were not items that he talked about on the campaign trail.
CARNEY: He talked explicitly and broadly about his approach on this issue, which included letting rates return to Clinton-era levels for the top 2 percent and included, broadly, $1.6 trillion in revenues from the wealthiest.
And if you look at his proposals — and we were very explicit about this both here in Washington, when we were engaged in legislative negotiations with Congress, and broadly throughout the year — those proposals included — I mean, I’ve talked numerous times about — last year and the year before about capping deductions at 28 percent for the wealthiest -
TAPPER: Yeah – I followed the president on the campaign trail, I didn’t hear him really talk about -
CARNEY: Well, he did, Jake. I mean — and he would — he would — certainly, when engaged with reporters on discussions about his detailed plan, he would talk about this. This is something that –
TAPPER: Limiting deductions?
CARNEY: — it is — it is — absolutely. For the top 2 percent, absolutely. And it is something that he has been explicit about for more than a year now, since September of 2011 when he put forward that proposal to the supercommittee.
TAPPER: Is one of the reasons that there’s stimulus in his proposal because of the concern he has to offset economic damage caused by any of the tax increases?
CARNEY: I would say that one of the reasons for measures that would put Americans back to work is that we need to continue to grow the economy. And he has always believed that you don’t achieve — deficit reduction is not a goal unto itself; that we need to achieve deficit reduction in a way that doesn’t halt the progress we made or throw us backwards. And one of the reasons why people are so concerned about the prospect of the fiscal cliff is that the combination of tax increases and spending cuts across the board would have a negative impact on economic growth and on hiring. So we need to do it in a smart way.
And the president’s long believed and been very explicit about — that even as we find savings and enact cuts in programs where we — they can be found and can be enacted, we need to make targeted investments in infrastructure, research and development, or education and the like that help our economy grow in the long term. So –
TAPPER: So the answer’s no? It’s not there — it’s not there to offset any economic harm to job growth that might result as a result — because of the tax increases on wealthier Americans?
CARNEY: It’s not. It’s not.
CARNEY: It is a part — I mean, in the sense that it’s not specifically designed for that, it is part of the president’s broader approach to this, which is that you need to be very discriminating in how you approach it. You need to achieve savings where you can, significant savings, a trillion-plus in the original Budget Control Act, in discretionary nondefense and defense savings, additional $600 billion in savings put forward as part of his proposal, and in revenues from the wealthiest 2 percent. Coupled with that, you need to make targeted investments that help the economy grow, because, you know, the balance in the package is essential for the broader goal here, which is stronger growth, stronger job creation. He also believes that as a principle, deficit reduction done well, done right, is positive for the economy. So there aren’t pieces — they all go together, in his mind.
TAPPER: One last question. On the subject of Israel, in the last few weeks, whether it comes to the U.S. lobbying against the declaration of statehood or whatever for the Palestinians, the very successful results of the Iron Dome and the U.S. support for Israeli military activities in Gaza, the U.S. has been very steadfastly standing by Israel. I’m wondering, in light of that, other than you expressing displeasure and any paper statements that have gone out on the matter, what the Obama administration, what the president has done or any of his emissaries to express displeasure with what the Israelis are doing right now in terms of settlements and other things described as punitive actions against the Palestinians.
CARNEY: Well, I would refer you to the State Department for communications that may be taking place, as they do on a daily basis, with the Israelis.
TAPPER: So the president hasn’t called Bibi?
CARNEY: I don’t have any conversations of the president’s to read out. But you know, I want to be clear. We oppose unilateral actions that make a return to bilateral negotiations harder.
We oppose, as we long have, Israeli settlement activity and construction in East Jerusalem because they are counterproductive to what we believe is the goal here and should be the goal, which is Israel and a Palestinian state side by side, living in security and freedom. So –
TAPPER: Did we know — did the U.S. know about this before the Netanyahu government announced it?
CARNEY: You know, I wouldn’t — I would refer you to the State Department for those kinds of communications. I can just tell you that –
TAPPER: But in the past, they’ve done it without notifying. In fact, I believe there was one time in — when it was — Netanyahu was arriving here and the announcement was made.
CARNEY: I don’t have information to give you –
TAPPER: When you worked for the vice president — you must remember, when you — when the vice president arrived in Israel one time there was an announcement. That must have been fun.
CARNEY: I can just tell you, Jake, that I don’t have any specific information about those communications between the Israeli government and this administration. We — I don’t think we could be clearer about our position that we oppose unilateral actions that make the return to bilateral negotiations harder. We oppose Israeli settlement activity and construction in East Jerusalem and, you know, we’re obviously communicating that.
TAPPER: But there’s no consequences. They’ll do whatever and you’ll –
CARNEY: Yeah, I don’t have anything additional to provide to you on that.