Driving the Week: Raising Taxes
Late Friday night, Congress agreed to a framework to fund the government for the remainder of the fiscal year. President Obama was eager to claim credit, just as we predicted he would a few weeks ago. As the Wall Street Journal noted, “Mr. Obama has now agreed to a pair of tax cut and spending deals that repudiate his core economic philosophy and his agenda of the last two years—and has then hailed both as great achievements.”
But do not expect President Obama to continue repudiating his core economic philosophy. Over the weekend, senior White House adviser and campaign guru David Plouffe announced the President would soon lay out his plan to cut the deficit. Core to the President’s plan – aside from Obamacare, ha! – will be tax increases.
Up until now, President Obama has largely avoided the discussion. His 2012 budget proposal was a continuation of the status quo, leaving the recommendations of his prized deficit commission to whither in the dustbin of history. According to Wall Street Journal, so surprising was the President’s sudden reengagement in the deficit issue, it caught Congressional Democrats completely off guard.
On Wednesday, we’ll see a sharp contrast. President Obama will outline some modest reforms and propose the sort of tax increases he once admitted were harmful to a struggling economy. Raise your hand if you’re surprised!