Obama officials: Taxes may rise to pay health care

By PHILIP ELLIOTT, AP

Mon Aug 3, 7:35 AM EDT

Two of President Barack Obama's economic heavyweights said middle-class taxes might have to go up to pare budget deficits or to pay for the proposed overhaul of the nation's health care system.

The tough talk from Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers on Sunday capped a week that brought rare good news for the economy: The worst recession in the United States since World War II could be on the verge of ending. Even so, officials appeared willing to extend unemployment benefits.

Geithner and Summers both sidestepped questions on Obama's intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to reduce the federal deficit; Summers said Obama's proposed health care overhaul needs funding from somewhere.

"There is a lot that can happen over time," Summers said, adding that the administration believes "it is never a good idea to absolutely rule things out, no matter what."

During his presidential campaign, Obama repeatedly pledged "you will not see any of your taxes increase one single dime." But the simple reality remains that his ambitious overhaul of how Americans receive health care — promised without increasing the federal deficit — must be paid for.

"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."

On Friday, a report detailed the economy dipped only slightly in the second quarter of this year — falling at a 1 percent annual pace, better than expected. The government report permitted optimism that the economic downturn is approaching its end.
The president cautioned against instant turnaround, though.

"Well as I've said, I think we maybe are beginning to see the end of the recession but it's still going to be some time before we are seeing companies hiring again, that's usually the last thing that happens," Obama said in an interview with Univision that aired on Sunday.

"So I think we are still going to have a tough remainder of the year — probably until next year — but, you know, at least what we are seeing — we've pulled back from the possibility of a depression. That's not the danger."

And many analysts think the economy is starting to grow again in the current quarter, setting up a long-awaited recovery.

"Most private forecasters — and let's use their judgment — suggest you're going to see unemployment start to come down maybe beginning in the second half of next year," Geithner said, adding those same economists predict positive growth during the second half of this year.

At the same time, Geithner and other administration officials are contemplating how to ask Congress to extend — again — unemployment benefits for the millions of Americans who have lost their jobs in recent months. The proposal drew measured support from Sen. Jim DeMint, R-S.C., as long as the benefits are drawn from the already approved economic stimulus package.

"We need to take care of those who are unemployed, but we also need to make sure they get jobs," he said.

Those jobs, though, are still elusive. Former Federal Reserve Chairman Alan Greenspan said the economy is slowly coming back and that he is "pretty sure we've already seen the bottom."

"Collapse, I think, is now off the table. We were teetering for a while," he said.

Geithner and Greenspan appeared on ABC's "This Week." Summers appeared on NBC's "Meet the Press" and CBS' "Face the Nation." DeMint was interviewed on "Fox News Sunday."

http://www.comcast.net/articles/finance/20090731/US.Economy/print/

Huh? We have large deficits that will be fixed by creating healthcare for all? Wow, and I always thought the way to eliminate deficits was to spend less and/or increase taxes. Silly me, must have missed that day in economics 101 where they discussed healthcare being the end to deficits...

Well, we know one guy who won't be paying for it.
Everytime Geithner says "tax" I chuckle.

http://finance.senate.gov/press/Bpress/2009press/prb011309d.pdf

I don't find this shocking. I find it par for the course for our two party wealth confiscation system...Both sides are playing against the middle...class, that is.

Come on BO, raise the taxes on the middle tax, do it and seal your fate in 2012.

Can't wait to hear Mr. Gibbs spin this one....

I think his fate is already sealed...7 months in, nothing meaningful accomplished, other than drinking a beer...

Agree happy. His poll figures have plummeted. He has seen so many of his worshipers jump ship. I would say that if an election were held right now he would win but with his TARP spending, tax increase suggestions, racist rants, and health care proposal he sees more of his worshippers leaving him. I hope all who voted for him see a valuable lesson. Don't get caught up in the hype. For the most part he said he would do this.

Actually GT, he didn't say he was going to do this, but his record, as limited as it was, showed he would do this.

actually, he really didn't say anything at all, and what he did say was nothing that he could be held accountable to...

I'm amazed that with control of the House and Senate, this President can't get anything done. My concern during the election was that he was all flash, no substance. So far, I've been right. I don't know that McCain would have done any better...This country NEEDS a viable third party to break up the Dem/Rep monopoly!

<---- basking in the Hopey-Changeyness

HaHa! This is how I read your post:

This is hopey-changeyness...and this is shinola. Now you know the difference.

There's a difference???

Excellent idea, Bouch. Done!

But I thought Obama supporters told us all he wouldn't raise taxes on the middle class?!

Those of us who didn't buy into his hype predicted he would do this, because all the things he wanted to do would require it, and we were told we were wrong.

It's too bad we'll be the ones paying for it!

Many of those who voted for Obama had nothing to lose and no real stake in the game.

As usual, the middle and upper income will pay for the lower income.

As someone who voted for Obama I will say this:

I don't mind my taxes going up if a decent health care plan is passed. But if it's some watered down junk like the stimulus was I don't think that it's worth the time, effort, and money. All we have to do is look at Massachusettes. Romneycare is dumbly becoming a model for congress, and for no real reason. Go big or go home. I would support a "medicare for all" system knowing that my taxes would have to go up to support it. But I don't want some mishmash that's designed to please everyone but ends up doing nothing to address the problem.

But I did see that Gibbs walked back the comment today at the afternoon presser.

I just don't trust the Gov't to run anything efficiently or better than the free market.

Revamped adequate regulatory guidelines over the current system are a far better course of action in my opinion.

Oh, it will be big. Huge. Enormous. Gargantuan. Would make Deek's hairstyle look like a crewcut in comparison...

It'll be big enough to cause a budget problem, but small enough to not matter in the end.

I could not disagree more.

sorry bucs, but $1.5 trillion is not small...and we'll be looking at some huge taxes to fund this...

I guess I should clarify: "not matter in the end" means that it will not make a serious dent into our healthcare problems.

I'm of no illusion that the budget will be hit by this.

It was also nice to see that Obama gave a seat on the Healthcare planning group to the biggest drug lobby in America. That's for all the change, Big O!