Jack Lew Defends Tax Increases in 2013 Budget, Insists Congress Extend Payroll Tax Cut


Less than 24 hours before President Obama's 2013 budget is delivered to Congress, White House Chief of Staff  Jack Lew aimed to pre-empt the inevitable onslaught of criticism Sunday, defending the budget's $1.3 trillion in additional deficit spending and $1.5 trillion in added tax revenue.

"We have tax cuts that go to people who don't need them," Lew told me on "This Week."  "We have tax cuts going to the wealthiest people in America who are going to have to pay their fair share."

Similar to his 2012 budget, the president's 2013 budget calls for a minimum tax rate of 30 percent for millionaires and ends the Bush tax cuts for high-income earners.

Lew said that for every dollar of revenue, the budget includes $2.50 in spending cuts, including cuts to Medicare, Medicaid, agriculture subsidies and federal civilian workers' pensions. Over the next decade, Lew said, the president's proposal will reduce spending so it will no longer add to the deficit and will create stability in the economy.

But despite the cuts, the president's budget would mark the fourth straight year deficit spending that exceeds $1 trillion. The deficit spending comes after Obama pledged upon taking office in 2009 that he would "cut the deficit we inherited by half by the end of my first term in office."

Lew defended that failed pledge on Sunday.

"When we took office, the economy was falling so fast that the first thing we had to do was put a bottom in," Lew said. "That cost money in the Recovery Act.  It cost money in terms of lost revenue and slower economic growth.  We're on track now.  We've seen several months of sustained economic growth and job creation, but we're not out of the woods yet."

Lew said the "American people should be pleased" with the recent uptick in the economy, but emphasized that the slow recovery is still in need of an "extra push," which Lew said should come in the form of a payroll tax holiday extension.

The tax cut extension is currently stalled in a conference committee as the House and Senate seek to reconcile how to pay for extension. Lew called on Congress to "finish their work" and pass the payroll tax cut "on time."

House Budget Chairman Paul Ryan, R-Wis., said he believes the tax cut will be extended but blamed Obama and Democratic Party leaders for the delay, saying they are "not engaging" in compromise conversations.

"We've taken provisions from the president's own budget as ways of paying for this payroll tax holiday, yet they continue to insist on not agreeing to those kinds of things," Ryan said in an exclusive interview on "This Week." "It's difficult to see exactly how this is going to pan out."

Ryan said the American people would recognize that the House is acting while the Senate is stalling such legislation. Thus, he said, he is not concerned that Congress' dismally low 10 percent approval rating would result in Republicans losing control of the House in the 2012 election.

"There's a very big difference between all the action to deal with our country's big problems in the House and just the total inaction by the Senate," Ryan said. "The House is acting and the Senate is sitting on their hands playing partisan politics."

Lew defended the Senate, pointing out that the upper chamber has to get 60 votes in order to pass a budget, a feat he said was a "challenge" when there is "no willingness to work together."