Axelrod Won’t Tip Hand on Tax Cut Compromises

Posted November 14, 2010 at 9:49am

Updated: 1:18 p.m.

White House senior adviser David Axelrod refused Sunday to directly answer whether a temporary extension of the 2001 and 2003 tax cuts for upper income levels has been ruled out, telling the host of “Fox News Sunday,” “I’m not going to negotiate with you on this program.”

He also said the administration will wait until the president’s deficit commission issues its final report before commenting on its proposals. As for his own future, Axelrod predicted he would move from the White House and into his role in Obama’s re-election campaign sometime in the late winter or early spring.

The tax cuts expire at the end of the year, and President Barack Obama has sought to permanently extend them for the first $250,000 in income for families, while Republicans and some Democrats seek an extension for all income levels. Although the president has ruled out a permanent extension for upper income levels, he and his advisers have appeared to leave themselves some wiggle room for negotiating a deal on a temporary measure in order to secure the cuts for lower income levels.

“Let me repeat what the president’s position is: We have to extend these middle-class tax cuts — absolutely have to do that. We should do that permanently,” Axelrod said Sunday, adding that the president’s position has “not changed at all.”

He added, “We cannot afford to go the additional step and permanently cut taxes primarily for millionaires and billionaires at the cost of $700 billion for the next 10 years alone.”

Obama “is eager to sit down and talk about where we go from here,” Axelrod said. The president has invited a bipartisan group of leaders from both chambers to the White House on Thursday.

Sen. Jim DeMint said he would be willing to compromise with the president to pass a temporary, across-the-board extension.

“I hope we can get a permanent extension,” the South Carolina Republican told “Fox News Sunday” host Chris Wallace. “But if the president wants to compromise on a two- or three-year extension, what’s important here, Chris, is that businesses know what their tax rates are going to be over the next few years so they can plan growth and plan to add people. If we keep things in a state of flux, I’m afraid we’re going to continue to have a jobs problem.”

Meanwhile, Sen. Charles Schumer pushed his compromise proposal to extend the tax cuts for everyone making less than $1 million a year during an appearance on CBS’ “Face the Nation.”

“I think there is a compromise in the making,” the New York Democrat said, predicting that Republicans would not want to be seen holding up tax relief for the middle class over millionaires and billionaires. Schumer said his proposal would also protect nearly every small business from paying higher taxes.

Sen. Mark Warner offered his own alternative for handling the expiring tax cuts in an editorial in the Financial Times on Thursday. The Virginia Democrat argues that the tax cuts should expire for the top 2 percent of American earners and that the revenue generated should be used to create targeted business tax cuts and incentives to spur private-sector investment. Obama would use the revenue to pay down the deficit.

“I’m new in the Senate, but most of these contrary extensions have a tendency to end up becoming permanent and most economists would say giving folks like me an additional tax cut might not be the best value,” Warner said in explaining why he would let the upper income tax cuts expire.

Axelrod also took a wait-and-see stance on tackling the deficit. The two co-chairmen of the National Commission on Fiscal Responsibility and Reform released their bipartisan draft proposal last week for cutting $4 trillion from the deficit over the next decade, but the president’s panel  has not made its official proposal.

“The president empaneled this commission for purposes of looking at this very difficult problem, and we’re eager to look at all the recommendations once the commission reports,” Axelrod said. “And his commitment to the chairmen was to refrain from commenting on their work until after Dec. 1,” when the report is due.

DeMint’s South Carolina colleague, Sen. Lindsey Graham (R), said Sunday on ABC’s “This Week” that all options need to be on the table.

“We need to get Social Security stabilized before it goes into permanent bankruptcy,” he said. “We’re going to have to increase the [retirement] age. We’re going to have to manipulate benefits for upper-income Americans. We’ve got to put everything on the table, including stable revenues. And I’d like to see this commission help lead the Congress to get some results that have been kicked down the road for far too long.”

Sen. John McCain (R-Ariz.) agreed on “Meet the Press.” “Everything should be on the table,” the Arizona Republican said. “If it’s not, then obviously I don’t think we’re going to make progress. … And so maybe the environment has changed enough that Americans will respect us making some tough decisions.”

Steven T. Dennis contributed to this report.