I recommend Ed Luce's commentary on Obama's press conference over at Gideon Rachman's blog. Ed writes that the economy was dealt with rather briskly, and not all that convincingly, and that the questioners turned surprisingly quickly to Islam, Afghanistan and security issues. That was my impression too. Ed's also right that Obama was fine with that. He seemed far more comfortable once he was spared having to talk about the economy.
I was listening for signs of flexibility on upper-income tax cuts.
Q: Thank you, Mr. President. You're looking for Republican help on the economic proposals that you unveiled this week, and you also mentioned the small business bill. But you're at odds with them over tax cuts. Is there room for a middle ground whereby, for example, the tax cuts on the wealthy could be extended for a period of time, and then allowed to expire?
THE PRESIDENT: Well, certainly there is going to be room for discussion. My hope is, is that on this small business bill that is before the Senate right now, that we actually make some progress. I still don't understand why we didn't pass that two months ago. As I said, this was written by Democrats and Republicans. This is a bill that traditionally you'd probably get 90 percent or 100 percent Republican support. But we've been playing politics for the last several months. And if the Republican leadership is prepared to get serious about doing something for families that are hurting out there, I would love to talk to them.
Now, on the high-income tax cuts, my position is let's get done what we all agree on. What they've said is they agree that the middle class tax cut should be made permanent. Let's work on that. Let's do it. We can have a further conversation about how they want to spend an additional $700 billion to give an average of $100,000 to millionaires. That, I think, is a bad idea. If you were going to spend that money, there are a lot better ways of spending it. But more to the point, these are the same folks who say that they're concerned about the deficits. Why would we borrow money on policies that won't help the economy and help people who don't need help?
But setting that aside, we've got an area of agreement, which is, let's help families out there who are having a tough time. As I said, we could, this month, give every American certainty and tax relief up to $250,000 a year. Every single American would benefit from that. Now, people who make $250,000 a year or less, they'd benefit on all their income. People who make a million dollars would benefit on a quarter of their income. But the point is, is that that's something that we can all agree to. Why hold it up? Why hold the middle class hostage in order to do something that most economists don't think makes sense?
Q So are you ruling out a deal with Republicans on tax cuts for the wealthiest?
THE PRESIDENT: What I'm saying is let's do what we agreed to and that the American people overwhelmingly agreed to, which is let's give certainty to families out there that are having a tough time.
A shame nobody just asked whether he would veto a bill that postponed the upper-income tax hike. But he was careful to rule nothing out. "Well, certainly there is going to be room for discussion." Make of that what you will.
Obama could be right that letting the upper-income tax increases take immediate effect makes good fiscal sense. I doubt he would be proposing it, or that anybody else would be calling for it, if the Bush tax cuts had not been foolishly and dishonestly pre-programmed to expire, but let that pass. The question is how Obama's position will play politically. Will people think, "fiscal responsibility"? Or will they think, "class war"? (And if the latter, will that help him or hurt him? On net, I would say hurt.) I notice he has worked on the rhetoric, settling on this line about "giving an average $100,000 to millionaires". Hmm. There needn't be any millionaires in a two-earner household making $250,000 a year. That line works better for a tax increase on households earning more than a million a year. (You read it here first.)