- The Washington Times - Tuesday, November 27, 2012

President Obama embarked Tuesday on a tax-increase strategy that avoids direct negotiations with Congress in favor of trying to rally the public to exert more pressure on Republican lawmakers.

While one of the president’s top Senate allies urged that negotiators leave budget-busting entitlement programs untouched in the lame-duck session, Mr. Obama met with a group of small-business owners at the White House in his quest to raise tax rates on families earning more than $250,000 per year.

He scheduled a Wednesday meeting with middle-class taxpayers who would pay an average of $2,200 more per year if Congress fails to extend their tax cuts by Dec. 31.

The White House also announced that Mr. Obama will travel to Hatfield, Pa., on Friday to tour a manufacturing plant and give a speech on the urgency of preserving tax cuts only for families earning less than $250,000.

Republicans blasted the president for posturing in public rather than leading Democrats in the hard work of negotiating a deal to avoid the so-called “fiscal cliff” of tax increases and spending cuts due to take effect in January.

“We already know the president is a very good campaigner,” said Senate Minority Leader Mitch McConnell, Kentucky Republican. “What we don’t know is whether he has the leadership qualities necessary to lead his party to a bipartisan agreement on a big issue like this.”

Some in the GOP pointed to comments by Senate Minority Whip Richard J. Durbin, Illinois Democrat, who said Tuesday that Social Security, Medicare and Medicaid should not be included in any deal reached in the next six weeks. Mr. Durbin said lawmakers should address ways to preserve the entitlement programs next year in long-term negotiations.

“I think we should take Social Security off the table for the current fiscal cliff and deficit reduction but be very honest about what we’re going to achieve in the near term,” he said.

White House press secretary Jay Carney said Mr. Obama is focused on immediately extending tax cuts for the middle class and wants to work on solutions to other fiscal challenges next year.

“The president’s position is that when we’re talking about a broad, balanced approach to dealing with our fiscal challenges, that includes dealing with entitlements,” Mr. Carney said.

With no meetings with congressional leaders on the president’s schedule this week, Mr. Carney defended Mr. Obama against the suggestion that talks have broken down and the president isn’t working hard enough with lawmakers to strike a deal.

“He will speak with them and meet with them as appropriate,” Mr. Carney said of congressional leaders. “The president will continue to engage with the American people on this subject, because we are all here … to serve the American people.”

The main sticking point in the talks is Mr. Obama’s proposal to raise tax rates. Republicans argue that it will discourage small businesses from creating jobs, but the president contends the revenue is needed to lower deficits and pay for higher spending on education, transportation and other priorities.

The administration has rejected Republicans’ position that ample revenue can be raised by closing tax loopholes and limiting itemized deductions for wealthier taxpayers. But a report by the nonprofit Committee for a Responsible Federal Budget offered three detailed proposals on Nov. 15 that would raise the amount of revenue sought by Democrats without raising marginal rates, instead capping deductions or closing loopholes.

“There are some relatively simple tax changes that could be enacted for tax year 2013 to raise the same amount of revenue as letting the upper-income tax cuts expire, from only households earning above $250,000, and without increasing current tax rates,” the group said.

Some Democratic lawmakers argued Tuesday that the government can’t raise enough revenue without raising marginal rates. Mr. Durbin told reporters that changes to the tax code alone would affect too many middle-class taxpayers.

“I think you’ve got to include [an] increase in rate, as well as changes in the code itself,” Mr. Durbin said. “If you are going to go to the tax code and hit deductions and credits to get to your number, you are going to get right in the middle of working families and middle-income families, and I don’t think Democrats will stand for it.”

Sen. Ben Cardin, Maryland Democrat, said the best way to raise reliable revenue in the fiscal-cliff negotiations would be by raising taxes on the nation’s top earners and also increasing taxes on capital gains and dividends.He said it is difficult to predict the amount of revenue that can be raised from closing loopholes and deductions in the tax code, so that discussion should be handled as part of a separate conversation about reforming the tax law.

“You don’t know the consequences when you start fooling around with the deductions and exemptions outside tax reform. So I think the easiest way is to raise rates,” Mr. Cardin said.

Seth McLaughlin contributed to this report.