Last Wednesday we participated in a White House blogger conference call after the President’s speech on the economy which included David Plouffe, Dan Pfeiffer and Brian Deese from the National Economic Council and a whole bunch of A-list bloggers. And Z-list us. The transcript of the question and answer session follows:
Question: …Um, in his speech today President Obama said that he would refuse to, to extend the tax cuts for millionaires and billionaires again. I was wondering if this would be the case even if no deal could be struck with Republicans to do so and thus the only path of, of keeping them from being extended would be to have all of Bush tax cuts expire, including for those making under two hundred fifty thousand dollars.
David Plouffe: Well, there’s, I, I think that, uh, the President’s view on this is clear that the, you know, middle class, obviously, particularly given that we have a healing economy but we have a long way to go, middle class people are obviously feeling the effect of, of gas prices and food prices right now. Obviously, the tax bill that was struck carries forward to the end of, uh, two thousand and, and twelve. Um, you know, the President’s been, been very clear, uh, on this, and restated it today. He’s not gonna renew, uh, those tax cuts. And, uh, you know, particularly if the economy hopefully continues to strengthen, um, uh, you know, he believes that the wealthiest in this country, uh, you know, are gonna have the ability, uh, to contribute both to deficit reduction and obviously, uh, to go to tax rates where they’ve been very successful in the past. So, uh, you know, under what scenario that comes up we obviously don’t know now. Uh, but, but as he said back in December of last year, uh, and restated today, he, he’s not gonna renew that. And, and I think in the future, uh, there’ll obviously be a debate about the middle class tax cut. There’s some people who don’t think that those should continue. Uh, I think the President, uh, believes that, uh, uh, he’s, you know, cut a lot of taxes for the middle class over the last two years. He thinks it’s one of the reasons, uh, that the economy is, uh, is growing, the tax bill that was struck in December. Uh, and, but, but, you know, the notion that somehow the only way to do middle class tax relief, uh, is to have the wealthiest in this country, uh, once again, uh, come along for the ride, uh, you know, the President doesn’t support that. So, uh, you know, that’ll be a debate. Obviously, uh, you know, again, it’s the law through next year, uh, so, uh, you know, I assume this’ll be part of, uh, whatever political discourse happens next year. Um, you saw some of the reaction to the President’s speech today. Uh, and, you know, that’s a debate the President’s comfort, comfortable having. Uh, more than comfortable having. And, you know, we, we’ve had it, uh, you know, in two thousand and eight, certainly. But, not in a campaign context as we, as we go into the, the next few weeks here. You know, I, I think we’re gonna have a debate here in the country and here in Washington about the best way to go about deficit reduction. Uh, and the President believes that, uh, uh, an answer that asks so much of the middle class and so much of seniors and so much of the poor, and not only just doesn’t ask something of the very wealthy, but lavishes them huge tax breaks. Again, think about that. The average, as the President said in his speech today, uh, he’s been very fortunate in his life, uh, at least lately, so he would get a two hundred thousand dollar tax cut that would get paid, essentially, by thirty-three seniors in America paying six thousand more dollars, uh, for their health care costs. And he said today, uh, you know, not on his watch. It’s not gonna happen as he’s President. Uh, so, uh, you know, I think the President’s gonna be clear that, uh, as we look at these tax issues down the line, um, uh, you know, uh, what happened in December, uh, is he said in December, uh, is not something he’s in favor of going forward…
…Question: Okay, so, just to be clear, the answer is yes, he’s not gonna renew them again under any circumstances.
David Plouffe: Well, I would say again, what, what he said today is he’s not gonna renew them. Uh, and he does not believe, first of all, that that makes fiscal sense. Uh, and we can’t hold, you know, sort of middle class tax, uh, cuts down the, again, I know, you know, there’s a long time between now and that, so exactly what form and when, but the notion, uh, that the only way we’re gonna get middle class tax [inaudible], particularly if the economy is, is healing now, uh, uh, is to connect them to the wealthy, uh, the wealthy tax cut, the Bush tax cuts, he’s not gonna be in favor of that.
Question: …Simpson Bowles mentioned a robust public option as one of the proposals that they would put out there for cutting health care costs. Is that something the White House would consider being on the table?
Brian Deese: …The framework that the President put out today included a set of proposals, uh, and [inaudible] will be sensible and important and build on the framework that was put in place, uh, with true health reform. And it would both, uh, increase some of the cost saving measures that actually bring down the rate of heath care costs, uh, growth through that, uh, uh, through that legislation and also incorporate new reforms, including on Medicaid by strengthening the federal state partnership, increasing the efficiencies for states, and asking more accountability of states as well. Uh, I think our view is that those steps taken together would really [inaudible] the deficit reduction potential of the Affordable Care Act and have the potential to actually double, uh, the, uh, deficit reduction savings, add another trillion, uh, in deficit reduction, uh, in, uh, the second decade of the [inaudible] reforms. So we think that the, the framework that we put down today would really, uh, be good for the health care system overall and helping further bend, uh, bend the cost curve. Uh, but, also for, uh, for, uh, reducing the deficit as well. So, that’s, uh, that’s the, that’s the approach that we’re putting forward, uh [crosstalk]…
Question: [inaudible] the approach put forward. I asked you a question about the public option. I mean, you simply restated what your proposal was. So are you saying the White House would not be amenable to considering the public option?
Brian Deese: Uh, I think, I think, I think that we’re gonna go into a negotiation here and the president was putting forth what he thinks is a sensible balanced approach. Um, obviously, when you go into a negotiation, um, nobody’s going to, uh, you know, set preconditions on what others can put onto the table, but the President’s putting on the table what he thinks makes sense in moving forward on our, on health care reform.
Question: Okay. All right, thanks.
Question: …I had a question about the baseline, um, that you’re using for part of the tax, um, plan on a call earlier. I, I, basically it’s just reconfirming something that, uh, was s
aid on the call that you guys did earlier today for media. Um, there is, one part of the plan says that, uh, I think a quarter, uh, no more than a quarter of deficit reduction, um, will come from tax reform, from increased revenues from tax reform. And what I wanted to verify is that what, what was said on the previous call is that the baseline assumption is the expiration of the upper income tax, uh, cuts. So therefore, that twenty-five percent, the additional savings, tax reform, or the additional revenue generated by tax reform would be above and beyond the, um, expiration of the tax, uh, of the tax cuts for the wealthy. So, I just wanted to verify that that understanding is in fact what you all are proposing.
Brian Deese: Yes. Yes, that’s right. Uh, you know [inaudible] we had with our budget, uh, assumed the expiration of the Bush high income tax cuts. So, the four trillion dollar framework and the, uh, the one in four, uh, uh, dollar steps to reduction [inaudible] tax reform is, uh, in addition to the revenue impact of allowing the Bush tax cuts to expire.
Question: Do you have, uh, a sense, generally speaking, um, if you, if you were to, if you were able to break out what the, um, revenue impact of allowing those tax cuts to expire, how that would compare with the, uh, tax reform revenue?
Brian Deese: Yeah, I , over a, over a ten year budget window, uh, the full cost of allowing, uh, the, the Bush high income tax cuts to expire, uh, as well as returning the estate tax to its two thousand nine parameters, uh, which is the, you know, uh, the administration’s, uh, uh, policy, uh, is nearly a trillion dollars including interest, uh, or interest savings. [crosstalk]
Question: So, so, it would be roughly equal to the tax reform, uh, uh [crosstalk]…
Brian Deese: Yes.
Question: …There’s some confusion stemming from the, the meeting, uh, with the congressional leaders this morning. Uh, Speaker Boehner left and said that, uh, he’s heard from the White House that, uh, they would be open to a, uh, debt ceiling raising bill that had various reform elements attached to it, so, in other words, not a clean bill that was, uh, discussed by the White House, um, and by you David on, on Sunday. I’m wondering if, uh, that, if the Speaker has the facts correct. And, secondly, related to it, is, uh, it a possibility that the, uh, debt fail safe, uh, option that you talked about in the speech today, if that is something that could theoretically be attached to a, the, uh, uh, the ceiling being raised?
Speaker unknown: [inaudible] …to the second half of your question, it’s too early to get into, uh, where this [inaudible] We’re just beginning the process the President announced today. [inaudible] congressional leaders, um, and then from kickoff, um, the leaders gonna go, are gonna go, are gonna work on it, uh, [inaudible] come back to us with recommendations out of the board [inaudible] getting something done by June. Uh, [inaudible]…
Uh, our view on this, uh, [inaudible] has always been the fact that the debt ceiling is gonna get raised. Every, every member of Congress, uh, every leader in Congress that [inaudible] they said they’re gonna raise the ceiling. Uh, they’re, uh, it is, uh, but, it is our belief that they do not want to play chicken with the economy, uh, on this ’cause it would have, uh, calamitous effect. We are, we do not believe you need to, uh, you do not need the debt ceiling to deal with the deficit. [inaudible] done separately, um, and that’s our hope.
David Plouffe: …You know, listen, and I, I do think this is important, I mean, we’re at the point now where, you know, it’s not just the leadership, although that’s most important, but, you know, a lot of rank and file members of Congress in both parties. I mean, everyone’s been clear. We’re not gonna play chicken with the full faith and credit of the United States and risk an economic catastrophe. Uh, particularly just as we’re recovering from the last economic catastrophe. So, the debt limit is going to pass. Um, you know, uh, obviously exactly when, uh, what the process is, uh, will, uh, will be revealed. But, you know, now at the same time, and we’ve been clear about this, there’s gonna be important bipartisan discussions about reducing our deficit. Um, and that, there was a good discussion about that today with the President and the leadership. So, um, you know, we need to do the responsible thing in the coming weeks, which is passing the debt limit. But that doesn’t mean we shouldn’t start to make progress in reducing the deficit in a smart way. And, uh, and in terms of the, the fail safe, again, as Dan said, it’s too early. Uh, I think that was an important part of a proposal, it should give people confidence and if, uh, the projections aren’t right or if Congress doesn’t do all it should on the front end in terms of putting us on the right pathway, uh, you know, there’s gonna be a, uh, hard backstop. Uh, that forces Congress to, uh, to, uh, you know, to, to make decisions or be at the whim of the trigger. So, um, I think that’s important part of this and my sense is that something that should have some, um, you know, some bipartisan support.
Question: …One of the major concerns fro, uh, progressive community, uh, off of the speech with this three to one ratio of, uh, spending cuts to tax revenue that you outlined in the fact sheet, wondering if you could just sort offer a, uh, an explanation of how you settled on that and whether, and why you think that’s, uh, the best way to move forward.
Brian Deese: …I would just make one point going back to the, the question, uh, two questions ago. Um, when, when thinking about three to one ratio I think it is important to recognize that that is, uh, that is on a baseline that already assumes the, uh, expiration of the Bush high income tax cuts. So, uh, there is nearly a trillion dollars in revenue, uh, from allowing a, uh, Bush high income tax cut to expire, uh, that is not part of that [inaudible] framework. So, I think that’s, uh, that’s important, that’s important context of, and, you know, with respect to the question of, uh, balancing the need to have tax reform that, uh, that [inaudible] package. I think the, the balance of two dollars in spending cuts, a dollar in interest savings, and a dollar from, uh, uh, from revenues, which, you know, is three dollars in spending, including interest, plus revenue is a, uh, you know, is a, a, is, is, is an approach that has, uh, has economic logic but also, uh, uh, it is, is a framework that people, uh, could get around, particularly when [inaudible] we’re working off, working, we’re working off a starting point where we’ve already, uh, we’ve already gotten, uh, gotten rid of [inaudible].
David Plouffe: And I would just add, you know, to what Brian said is, you know, obviously the way this works is you don’t decide what the ratio should be and then get into the details. I mean this was built off of, you know, the President and his, uh, budget and economic team doing a lot of work about what the, you know, what the best pathway here is for the country, for the economy, for the people in the country. And, uh, you know, I think the President’s view is as it relates to, uh, uh, taxes, uh, you know, the middle class, people trying to get in the middle class, uh, you know, can’t afford, uh, additional taxes right now. Uh, you know, uh, they are, uh, still trying to, [inaudible] still trying to find work, obviously, some are trying to find better work, uh, obviously, uh, you know, people’s home prices, uh, the value of their, uh, you know, uh, savings account. Now, that’s come back a little bit. You’ve got, uh, you know, uh, consumer price pressure now. So the notion that somehow the solutions, uh, to our long term deficit reduction, uh, is to ask the middle class to pay more is something the President rejects. So, this is a smart composition that allows us to invest in the things that allow us to win the future, uh, uh, and,
uh, ask those that have the greatest ability to contribute who are doing, you know, remarkably well in this economy, uh, again, and it’s a choice. I mean, I think if you had to sum up the difference between the President’s approach and the approach of the Congressional Republicans, there’s many differences, [inaudible] certainly the approach to health care, uh, is, is an important one, but if that, you know, uh, senior citizens, uh, you know, the disabled, the poor, the middle class are asked to shoulder the burden. Uh, and not just for deficit reduction, they have to shoulder the burden for enormous tax relief for millionaires and even billionaires. Uh, and I think that’s a pretty stark contrast and I think it’s one the President, uh, was very eloquent in, uh, in laying out [inaudible] today.
Question: …I’m very interested in how this plays out politically in terms of, you know, how do you make this happen. Just listening to NPR in the last half an hour, you know, the, the Republicans are already out in front saying tax cuts completely of the table, which represents from what I’m hearing, roughly forty percent of, uh, of the, the formula [inaudible] we’re talking about. How do you, uh, how do you, you and the administration foresee this playing out so that, you know, we’re not in the hostage taking situation, you know, like we’ve been in, you know, two, three times here in the last year?
David Plouffe: Well, first of all, I mean, uh, you know, in terms of what we just, uh, completed on Friday night, um, I, you know, uh, we, uh, we’re very comfortable. Uh, we have the package that was agreed upon and that will eventually become law. Um, you know, we, uh, you know, the notion that somehow, you know, the Republicans got thirty eight million of their sixty million in cuts, I mean, that’s not what happened. Um, they got some of their cuts, mostly cuts that we were already, in our two thousand twelve budget that got carried, uh, forward. Uh, and the, to, the composition is what matters, not a numbers exercise it’s the composition. Uh, you know, does, and, and we believe that we’re able to maintain a lot of our important priorities and obviously make sure that some of the social policy they were trying to litigate, you know, on family planning and on clean air and clean water issues, uh, was, uh, was defeated. So, uh, and you know, they started that process, obviously, saying a sixty-one or bust and anything below sixty-one has to be all of our, you know, composition. That’s not where these things end up. So, uh, I think everyone, uh, you know, John Boehner said last week on ABC that, uh, you know, he was not gonna let revenues keep him from the negotiating table. So, there’ll be a process that will be worked on over the next couple weeks and starting in early May the Vice President will begin working with leaders, uh, in both parties and both houses to see if we can make progress here. And, uh, there are, no doubt, uh, you know, clear differences. Um, the one thing that seems to be in common, uh, most members of Congress in both parties believe that the deficit is an important issue. Uh, and, and there’s gonna be, uh, obviously, uh, you know, big disagreement about how to get there. And we’re gonna have to see, and, and what kind of progress we can make. Um, you know, and while the President was very clear that he disagrees strongly with most elements of the Republican congressional approach today, uh, he also stated very clearly that just as we have done, uh, in our, uh, in our past, but as also we have done in the last few months on tax cuts and on, on spending and the budget, uh, you know, the country’s gonna demand that our leaders, uh, try and come together here and find what common ground they can. So, there’s gonna be, uh, [inaudible]. Now you do have some Republicans in the Senate who clearly, uh, discussing, I think in an honest way, that any kind of, uh, deficit solution, uh, that doesn’t have revenues as a component is not an honest solution. You know, my hope is that that, uh, you know, uh, point of view, uh, grows, uh, in that party. That would be a helpful thing. But, uh, you know, let’s wait ’til we get through these negotiations and see and, and, uh, there’s no doubt they’re gonna be difficult. Um, but I think for the sake of the country everyone is gonna have to try and, and, uh, and find those sort of, uh, you know, common areas, stretch out of your comfort zone a little bit and see where we can end up. But, uh, but, you know, there’s no doubt this is gonna be, uh, you know, is everything gonna be resolved in the next weeks, I think that’s highly unlikely. But we need to make as much progress as we can. And, uh, obviously, this debate is been with us in the country for a long time and it’ll probably continue. We’re at the point now, though, from a fiscal situation, uh, that the rubber’s hitting the road. And we both are gonna have to, uh, agree on, on, uh, you know, the scale of the problem, uh, but then the difficult discussion of the means to, uh, to solve the problem. And, you know, that’s a debate that, you know, that we think is important. I, I think the President did a very good job of laying out [inaudible] the view of numbers today is a, you know, from the, I think from the, from the, uh, from values. This is about what kind of country we’re gonna live in, what kind of country we believe we can, uh, we can make here. And, uh, the notion that somehow we can, uh, you know, cut education by a third, the notion that we can ask seniors to pay six thousand more dollars in Medicare costs, I don’t know many seniors that can even begin to think they could afford a fraction of that, the notion that we’re gonna cut energy research, at a time of high gas prices, by seventy percent, you know, that’s not, uh, the America I think most people believe, uh, we need to build. So this is a fundamental discussion and debate and, uh, and, but, I, I do think that the, there seems to be, I will tell you, that I think that the meeting this morning was a constructive meeting, uh, both in tone as well as substance. And, uh, you know, obviously, uh, you know, as we get back from the congressional recess folks will gather and we’ll see what kind of progress can get made.