Obama's tax promise: Too tall an order

Reducing the deficit will be painful, especially if it's made worse by promises that are hard to keep.

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By Jeanne Sahadi, CNNMoney.com senior writer

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NEW YORK (CNNMoney.com) -- The middle class may have to pay more in taxes. That was the media's takeaway from comments made Sunday by Treasury Secretary Tim Geithner.

Once the economy recovers, Geithner said on ABC's "This Week," the United States is "going to have to do what it takes" to get the deficit under control -- and he said, like many budget analysts before him, health reform alone can't do the job.

"We're going to do a range of other things and that's going to be a very difficult challenge for this country," Geithner said.

White House spokesman Robert Gibbs scrambled to set the record straight Monday afternoon during his daily briefing. "I am reiterating the president's commitment in the clearest terms possible that he is not raising taxes on those that make less than $250,000 dollars a year," Gibbs said.

It's not entirely clear what Geithner was getting at. And there certainly are plenty of ways to raise revenue that don't involve taxing the middle class. But for President Obama to rule it out altogether when trying to combat major deficits makes the job so much harder.

As does another of Obama's big promises: to make permanent the tax cuts passed under former President George W. Bush for everyone except families making more than $250,000.

The president and his advisers seem to want it both ways on the tax cuts. On the one hand, they correctly identify those cuts -- which were not paid for -- as being one of the major culprits in creating the $1.3 trillion deficit the new administration inherited.

At the same time, the White House itself is not proposing to let those tax cuts expire -- a move that would raise an estimated $2 trillion over 10 years. Nor is it proposing to pay for the cost of making them permanent.

To be sure, the administration is pushing Congress to pass so-called pay-as-you-go rules, which would require lawmakers to pay for any tax cuts or spending increases they pass so they don't increase the deficit.

But the pay-go legislation the administration supports would not require that the tax cuts, among other things, be paid for.

"At best, pay-go is intended to stop the fiscal bleeding and, in this case, the exempted policies allow a lot of blood loss before the tourniquet is applied," said Robert Bixby, executive director of the Concord Coalition, in a statement.

There's no question Obama is in a tough spot -- but it is to some extent one of his own making. It's never easy to go back on a campaign promise. However, it's been done before and it may need to be done again.

But if he does concede the middle class might need to bear at least some of the debt burden weighing down Uncle Sam, you can bet his proposal for how to do that wouldn't take effect very quickly. And that's not just because the administration wants the economy to recover before seriously weighing its options.

Increasing the majority of Americans' tax bills is never a big vote-getter at the polls. With mid-term elections coming up for Congress in 2010, the president might have a very hard time selling the idea to lawmakers who are busy campaigning to save their jobs. To top of page

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