President Obama is hoping the same campaign tools that helped him win re-election will also deliver a policy win in the fight over federal taxes.
The president wants Congress to extend Bush-era tax cuts for most Americans, while allowing taxes to go up for the wealthiest two percent, and his aides are using email, social media and beyond-the-beltway campaign appearances, in hopes of putting pressure on Republican lawmakers.
Inside the Capitol, the old battle lines barely seem to have budged. Republicans resist higher taxes, while Democrats resist cuts to entitlement programs. GOP House speaker John Boehner emerged from his office on Friday to tell reporters budget talks with the White House were going nowhere.
“There’s a stalemate. Let’s not kid ourselves,” Boehner said.
Boehner sounded shocked by what Treasury Sec. Timothy Geithner had spelled out the day before as the president’s opening bid: an extra $1.6 trillion in tax revenue over the next decade. The president also insists that much of the money come from higher income tax rates on the rich, which Boehner says is the wrong way to go and this “was not a serious proposal.”
With the talks in Washington apparently coming apart, the president made a quick getaway outside of Washington, D.C., to a place where people still know how to put things together.
The president visited the K’Nex toy factory outside Philadelphia, where workers produce a kind of updated Tinker Toys, with bright plastic pieces that can be molded into roller coasters, steam shovels or even an American flag. The president described the factory workers as “Santa’s extra elves.”
This kind of factory visit was a staple of the president’s re-election campaign, and he also noted so too was his call for higher taxes on the wealthy.
“It wasn’t like this should come as a surprise to anybody,” the president said. “We had debates about it … and at the end of the day, a clear majority of Americans, Democrats, Republicans, Independents — they agreed with a balanced approach.”
Congressional Republicans acknowledged after the election that tax revenues have to go up, but they’ve yet to see eye to eye with the president about how much extra tax money should be raised or where it should come from.
Adding urgency to this debate is a New Year’s deadline, and unless the two sides cut a deal by then, taxes for everyone will go up automatically. The administration estimates it would cost a typical middle class family about an additional $2,200 next year.
K’Nex CEO Michael Araten, a Democrat, says he’d rather see his own tax rate go up by a few percentage points than drag the whole economy down. Araten expects that eventually lawmakers and the president will make a deal, but probably not before it comes down to the wire.
“At the end of the day they’re going to get done,” Araten says. “I think they recognize it’s too important for the American economy, and the American people are watching. And when the American people watch, usually our leaders pay attention.”
President Obama wants to make sure people do more than just watch. He’s activated his campaign email list, and is urging people to use Facebook, Twitter or plain old phone calls to contact their lawmakers and demand an extension of tax cuts for the middle class, and to remind Congress “not to get bogged down in a bunch of partisan bickering.”
The president knows he’ll have a better chance of winning higher tax rates for the wealthy if he can first disconnect those rates from the ones that middle class families pay. Republican lawmakers know that too, which is why they’re fighting hard to keep the two tied together.