During the presidential campaign, Obama promised not to raise taxes on the middle class, but that may soon change. His economic advisers aren’t ruling out a tax hike. This shouldn’t come as a surprise to anybody considering the level of expansion and spending of President Obama’s federal government:
Treasury Secretary Timothy F. Geithner and White House economic adviser Lawrence H. Summers have both delicately sidestepped the tax question on Sunday talk shows. Orszag has also refused to discuss what steps Obama might take to reduce the deficit in the budget blueprint he will present to Congress in February. But budget analysts say he has few real options.
“If you rule out inflating our way out of the problem and defaulting on the debt, there are two ways: Cut spending or raise taxes,” said William G. Gale, an expert on fiscal policy at the Brookings Institution. With more than 80 percent of federal spending devoted to politically untouchable programs such as Social Security, Medicare and Medicaid, he said, “it’s going to be really hard to make significant headway on the spending side. So that means you’ve got to think about taxes.”
Somehow I don’t think the President is determined to cut spending. I’m guessing that the administration will proceed to raise taxes for the middle class.
