Tax Pledge Is a Target As Deficits, Debt Grow; Obama Advisers Will Not Rule Out Broad-Based Hike
During last year's campaign, President Obama vowed to enact a bold agenda without raising taxes for the middle class, a pledge budget experts viewed with skepticism. Since then, a severe recession, massive deficits and a national debt that is swelling toward a 50-year high have only made his promise harder to keep.</br></br>The Obama administration has insisted that the pledge will stand. But the president's top economic advisers have refused to rule out broad-based tax increases to close the yawning gap between federal revenue and government spending and are warning of tough choices ahead.</br></br>Republicans are already on the attack, accusing Obama of plotting to break his no-tax vow, the same political transgression that cost Democrats control of Congress under former president Bill Clinton and may have cost president George H.W. Bush his job. Democrats say Obama is highly unlikely to break the pledge before next year's congressional election and observe that it would be safer to wait until his second term if a tax increase becomes unavoidable.</br></br>Some lawmakers are focused instead on setting up an independent commission to solve the deficit problem. Senate Budget Committee chairman Kent Conrad (D-N.D.) plans to hold hearings on the topic when Congress returns to Washington this fall.</br></br>Obama, meanwhile, has vowed to pay for any new initiatives and to draft an overhaul of the health-care system that eventually would save the government money, driving deficits down. But effective health reforms would take decades to produce savings. In the meantime, White House budget director Peter R. Orszag acknowledged, "there are additional steps that will be necessary." "The administration is very concerned about these [future] deficits, and getting those deficits under control is a top priority of the administration," Orszag told reporters this week as he rolled out a new economic forecast that added $2 trillion to deficit projections from 2010 to 2019.