Former President Bill Clinton broke with Obama Administration orthodoxy this week by calling for all of the Bush tax cuts to be extended, even on the super wealthy, while Congress works on a permanent extension for everyone. Obama wants the tax cuts for all those making more than $250,000 annually to expire in order to trim federal deficits.
This January the tax cuts are scheduled to expire in addition to $1.2 trillion dollars in automatic spending cuts will occur without federal legislation. The non-partisan Congressional Budget Office has warned that if both are allowed ot hit in January there is a good chance the economy will plunge back into recession.
Clinton said on CNBC’s “Closing Bell With Maria Bartiromo.”,
“What I think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what’s necessary in the long-term debt reduction plan as soon as they can, which presumably will be after the election. They will probably have to put everything off until early next year. That’s probably the best thing to do right now.”
White House officials have so far not commented on Clinton’s remarks but ave said that the President has repeatedly said he will allow the tax cuts on the wealthy to expire.
In addition to the spending cuts and the tax cut extensions there is also a Social Security payroll tax cut, raising the debt ceiling and a provision to avoid huge reductions in Medicare reimbursements on schedule to go into effect for January. Any one of these issues can be highly damaging to the economy on its own, but the combination of all of them hitting at once could be catastrophic.
Last week Clinton told reporters that GOP Presidential nominee Mitt Romney had a sterling record at private equity firm Bain Capital. Obama is trying to make Bain Capital an issue in the campaign by using it against Mitt Romney saying he did little to create jobs and focused more on creating wealth for himself and partners.
Obama and Clinton have had a rocky relationship since Obama defeated Hillary Clinton in the Democratic Primary in 2008.