As part of its “fiscal cliff” public relations strategy, the White House calculates that impending tax increases would slow Georgia’s gross domestic product growth by 1.5 percent and reduce consumer spending by $6.2 billion in the state next year.
Along with President Barack Obama’s campaign-style trip to Pennsylvania on Friday and a Twitter initiative, the promotion of state-specific numbers demonstrates the president’s commitment to a negotiating style in sharp contrast the one in last year’s debate on raising the nation’s debt ceiling.
The data — including the fact that a median-income family in Georgia making $65,900 a year would see a $2,200 tax hike if all tax rates return to pre-2001 levels — represent a scenario that neither Democrats nor Republicans want. Republicans want to extend all of the George W. Bush-era tax cuts; Democrats want to extend them only for income under $250,000, while letting the rate rise on earnings above that level.
But a return to pre-2001 tax rates would happen for everyone unless Congress acts before the end of the year, and no compromise plan has emerged. Republicans blame this on Obama, whom they accuse of continuing to campaign rather than negotiate.
“The president is interested only in a political victory and is obsessed with raising tax rates as opposed to being obsessed with getting the economy rolling again,” said Roswell U.S. Rep. Tom Price.
But Albany Democratic U.S. Rep. Sanford Bishop said the approach makes sense.
“I don’t think it’s unfair for the president to put forth his strong cards, and at this point the majority of the American people have made it clear that they believe that the high-income people, that 2 percent, ought to be paying a larger share,” Bishop said.
Taxes are due to rise at the end of the year as part of an austerity package of expiring policies that could push the economy into a recession — including across-the-board spending cuts and the end of long-term unemployment benefits. Leaders are negotiating a way out, and there is discussion of cutting a major budget deal in the process.
The scenario is not unlike the fraught negotiations last year to raise the nation’s borrowing limit. Then, there were hours upon hours of meetings with top leaders and, eventually, Obama and Boehner met in secret to try to hammer out a deal. But those talks failed, and the multi-step compromise that did pass brought the current crisis — $1.2 trillion in cuts over a decade that many in Washington fear would do major damage to the economy and the military.
This time, the president intends to rally public support for his tax plan. In a speech Wednesday Obama encouraged supporters to go on Twitter to express how a $2,000 tax increase would affect them. On Friday he will visit a toy manufacturer outside Philadelphia, a trip White House press secretary Jay Carney said was intended to show how businesses would be harmed by a middle-class tax hike.
Meanwhile, Obama has had one in-person meeting with the key negotiators. Obama and House Speaker John Boehner spoke on the phone for nearly half an hour Wednesday night, and Treasury Secretary Tim Geithner met Thursday with congressional leaders on Capitol Hill. After the meeting, Boehner told reporters he was dissatisfied with the discussion.
Savannah Republican Rep. Jack Kingston predicted progress “once the president decides to show up to his own negotiations.”
Rep. Hank Johnson, a DeKalb County Democrat, said the outside strategy is appropriate, and “people need to know where the president stands.”
It could prove powerful, Bishop said, particularly if Obama gets a groundswell of support for his tax plans.
“We elected officials know we don’t get to these positions by ourselves — it’s the voters, the constituents who put us there,” Bishop said. “To the extent that those constituents start putting pressure on the members, the members are going to ultimately respond or not respond at their peril.”
Republicans have signaled no willingness so far to allow an increase in tax rates and insist that Obama must come forward with major spending cuts beyond those previously proposed if he wants any additional tax revenue.
“Right now, all eyes are on the White House,” Boehner told reporters Thursday. “The country doesn’t need a victory lap – it needs leadership. It’s time for the president and congressional Democrats to tell the American people what spending cuts they’re really willing to make.”
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