the WHITE HOUSEPresident Barack Obama

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The White House
Office of the Press Secretary
For Immediate Release

Press Briefing by Press Secretary Jay Carney, 7/9/2012

James S. Brady Press Briefing Room

See below for a follow up to questions (marked with asterisks) posed in the briefing.

*Per the Tax Policy Center, 2.7 percent of small business owners bring in over $250K in small business income. http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=2526&DocTypeID=7

1:22 P.M. EDT

MR. CARNEY:  Good afternoon, everyone.  Thanks for being here.  Welcome to the White House for your daily briefing.  I have no announcements to make at the top, so I’ll just go right to your questions.

Ken.

Q    Thanks, Jay.  The President laid out his plan today on taxes.  Republicans in Congress have said that they want to temporarily extend the Bush tax cuts across the board for all income groups.  If that bill were to reach the President’s desk, would he veto it?

MR. CARNEY:  Let me say a couple of things, Ken.  We have a lot of disagreement in Washington.  The President talks about it all the time -- the fact that we have a stalemate that has prevented us from doing some of the very important things we need to do to help grow the economy, to help it create more jobs, and to help make the middle class more secure. 

One thing that we all agree on -- virtually everyone in Washington, Democrats and Republicans -- is that the middle-class tax cuts should be extended.  We all agree.  That’s good for American families.  It’s good for the American economy.  That’s what the President announced today -- his absolute intention and willingness to sign a bill that would extend tax cuts for 98 percent of the American people.

If Republicans want to hold those tax cuts hostage to the tax cuts for the wealthiest Americans, including millionaires and billionaires, that seems pretty untenable.  That seems like a hard argument to make.  The President’s position is clear:  We should extend the tax cuts for the middle class, for 98 percent of Americans.  We should not extend tax cuts for the wealthiest Americans -- tax cuts for people who don’t need them and for whom it doesn’t even make a great deal of -- it doesn’t make economic sense to extend them.  As any economist whose PhD is worth the paper it is printed on will tell you, middle-class Americans -- hardworking, middle-class Americans, when they get that tax cut, it has a very positive and direct and immediate impact on the economy.  Wealthier Americans tend not to spend that.  And the cost, in terms of adding to our deficit, makes it a net loss.

So the President would sign tomorrow a bill that everybody agrees on -- extend the middle-class tax cuts.  He does not support extending tax cuts for the wealthiest Americans.

Q    Does that mean he would veto a bill that extends the tax cuts across the board then?

MR. CARNEY:  He would not support it.  He would not sign that bill. 

Q    During the weekend, several Democrats, including Robert Gibbs, were critical of Mitt Romney’s offshore bank accounts.  Does the President think that holding an offshore bank account would disqualify someone from being President?  And why is this relevant to the campaign?  How does this tell us how the next administration will help address the economy?

MR. CARNEY:  Well, look, I think you should take purely campaign related questions and address them to the campaign.  I can simply say that the President believes that disclosure is an important tradition, and a useful one, in this country, and it’s one that he’s followed as a candidate for office, both when he ran for the Senate and, obviously, when he ran for President in 2008, and again now running for reelection.  But beyond that I think you should take that question to the campaign.

Q    Is there something nefarious about a presidential candidate having an offshore account?

MR. CARNEY:  Again, that’s a question you may address to the campaign.  I think the issue here is most of these questions could be answered easily by any candidate who would simply disclose tax returns, as the President did, as virtually every major presidential candidate in recent memory has.

Alister.

Q    Jay, thanks.  The Bush-era tax cuts expiring at the end of the year are part of the fiscal cliff.  Is the White House open to exploring a deal that would tie together a postponement of the sequesters coming in as a way of pushing off the -- sort of the impact of all of those things happening at the same time on the economy?

MR. CARNEY:  Let me say two things.  One, in terms of creating some greater economic certainty, the initiative the President announced today, which is his absolute willingness and intention to sign a bill that would extend for a year the tax cuts for 98 percent of Americans, that would relieve -- that would create certainty for the vast majority of Americans, and it would have a very positive impact economically. 

Our position, the President’s position on the broader issues when you talk about the sequester -- it’s an action-enforcing mechanism.  And we all know what needs to be done to address our medium- and long-term fiscal challenges.  It’s very clear at length in the President’s budget proposal what his position is on how we need to move forward to address these issues, and that’s a balanced approach that includes non-defense discretionary spending cuts that we’ve already made and signed into law.  It includes reforms to entitlement programs to make them stronger and more cost effective.  And it includes asking the wealthiest Americans to pay their fair share so that we do not ask ordinary, hardworking Americans and seniors and parents of disabled children to be the ones to bear the full burden of getting our fiscal house in order.

Q    Well, but that’s his position.  But would he rule out doing a deal if it tied the two things together to get an extension, given you’re not going to get it done in this Congress?

MR. CARNEY:  Well, I think you’re trying to negotiate something that will be decided much later in the year, today.  I think what we made clear today, what the President made clear today is there are a lot of issues where we have a great deal of disagreement.  There is a stalemate in Washington that is due almost entirely to the fact that Republicans are so intransigent when it comes to asking that everyone pay their fair share and do their fair share. 

But one thing we all agree on, Democrats and Republicans alike, is that America’s middle class should have this tax cut extended, that their taxes should not go up on average $2,200 in six months.  Since we all agree on that, pass the bill in the Senate, pass it in the House, send it to the White House, the President will sign it.  And that will have a positive effect on those American families and on the economy.

Ann.

Q    Thank you.  Is the President wedded to that $250,000 threshold?  And does today represent a change?  Before, he said $200,000 for individuals; $250,000 income for households.

MR. CARNEY:  I think we’re still talking about households here.  The President’s position has been this very same position for a long, long time, and it has not changed and it will not change.  He believes that we should extend tax cuts for 98 percent of America’s taxpayers.  And we can do that -- he, as you know, is in favor of extending those tax cuts and making them permanent. 

But again, recognizing that there is a stalemate in Washington and that the broader issues of tax reform are very much a subject of contentious debate, let’s do something that can have a positive effect on the economy and have a positive effect on the finances of millions and millions and millions of American families, and pass this and sign it into law right away.

Q    Some of his Democratic colleagues have made the case for putting that threshold at a million dollars -- a way of letting the taxes go up only for those in a much, much higher category.  Would he negotiate anything like that?  Does he -- would he reject that?

MR. CARNEY:  The President’s position is clear; he announced it today.  Again, this is something we all agree on, and we should be able to have Congress pass.  The Senate Majority Leader, Harry Reid, has said that he looks forward to giving Democrats and Republicans in the Senate the opportunity to vote on this proposal that he supports, in the coming weeks.  The President very much appreciates that.

Again, here is the President’s position long held, encapsulated in this specific legislative proposal that everybody agrees on.  And I guess the question is, if Senate Republicans oppose this, if Republicans, beyond the Senate, oppose this, they have to explain why, because we’ve -- you were here, Ann, and so was I, and we saw what happened.  The tax cuts that were passed in the early part of this century, in 2001 and I think 2003, that disproportionately benefited the wealthiest Americans, they were -- we were assured at the time that the reason why they were so -- the right thing to do was because it would create prosperity for everyone -- that the middle class would benefit, that average Americans would end up benefiting. 

What we saw instead was an economy that created fewer jobs than during any period of expansion in recent memory.  We saw the incomes of the wealthiest Americans expand considerably while middle-class incomes stagnated or declined.  And then the end point of this experiment was the calamitous recession that was the worst economic recession, the worst crisis that we’ve had -- economic crisis that we’ve had since the 1930s.

So we tried that -- didn’t work out so well.  A good point of comparison in terms of tax rates for wealthiest Americans is the period before that, under President Bill Clinton, which you also covered.  And when those tax rates were put into place, I remember in 1993 some Republicans said it would cause a terrible recession and economic decline.  And instead, we saw the largest peacetime expansion in our history.  We saw an economy that created over 23 million jobs, I believe.  And we saw the first budget surpluses in a generation or more.

So when we’re looking at what these proposals are and comparing them, we don’t have to guess about what the impact would be if they were implemented -- if the President’s proposals were implemented versus proposals put forward by Republicans both in Congress and on the campaign trail.  We’ve seen the impacts of those policy proposals in the past.  And I think most people accept the premise that the statistics bear out, which is that the middle class did not do so well in a situation where tax cuts were given to, disproportionately, to the wealthiest Americans, and our budget deficits exploded and we ended up in a terrible recession.

Q    Where do you get the 97 percent figure for small businesses that would be under the $250,000?

MR. CARNEY:  Where do I get it?

Q    Yes.

MR. CARNEY:  Well, we can provide you the sources for this.*

Q    Thank you.

MR. CARNEY:  But this is a -- I’m glad you asked me about this, Ann.  The question is -- as almost -- on a save/get key, when this issue is raised about the need to end these tax cuts for the wealthiest earners in America, because we can't afford them, opponents of that policy come out and say, well, you're raising taxes on America's job creators, on small businesses.  But it is a fact that 97 percent of America's small businesses would not be affected by this.  It is a fact that of the 400 wealthiest Americans, roughly half of them would qualify as a small business under the definition put forward by Senator McConnell and others.

I think it's a useful exercise to ask those who hold up the banner of being defenders of small business on this issue to say, well, where are these small businesses and who are they who would be harmed by this?  And the fact is they're often partners in law firms or hedge fund managers.  They're not the kind of small businesses that you and I tend to think of when we talk about small businesses.  They're not the small businesses who have been helped again and again by this President, who has signed into law I believe 18 or 19 small business tax cuts and who has on his "To-Do" list for Congress another tax cut for small businesses that would go to small businesses that hire or raise their wages.

If members -- if Republicans in Congress are concerned about small businesses, they have an opportunity this week to vote for that proposal.  We look forward to them doing so. 

Move it around a little bit -- foreign policy, yes.

Q    Thank you, Jay.

MR. CARNEY:  Perhaps -- maybe you want to ask about the tax cuts.

Q    Afghanistan -- I'm sure you and everyone here has seen the video of the, quote, execution of the woman in the Taliban village.  General Allen had a statement, and I wanted to give you an opportunity to say something from the podium about that.  And I had another question on that as well.

MR. CARNEY:  Sure.  As you mentioned, General Allen, President Karzai, the U.S. Embassy have all spoken out to condemn the Taliban's public execution of an Afghan woman in the Parwan Province.  From here, I would echo that strong condemnation. 

Under the Taliban's rule, women's rights were ignored, attacked and eroded.  This cold-blooded murder is another reminder to the Afghan people and the international community of the brutality of the Taliban.  The United States stands alongside the Afghan people, and especially the women of Afghanistan, to ensure that the hard-won gains made by women in the last 10 years in that country are not only protected, but advanced.

Q    Can I ask you how this links over to the whole issue of talks with the Taliban and the kinds of things that this White House considers in this process of negotiations and, in fact, where those talks stand at this point?

MR. CARNEY:  Well, two points.  One, we support an Afghan-led process of reconciliation.  There cannot be peace in that country without reconciliation, ultimate peace.  The criteria that we have made clear must be present for any reconciliation process, for any Taliban who would reconcile, is that they would abide by the Afghan constitution, they would lay down arms, and they would renounce any ties to al Qaeda and to the tactics of al Qaeda. 

So those are the criteria that we put in place.  But reconciliation, I think everyone recognizes is something that has to move forward.  And we support an Afghan-led process of reconciliation.

Q    Did the President see that video?

MR. CARNEY:  I haven't discussed it with him.  I don't know.

Q    Can I follow on Afghanistan?

MR. CARNEY:  Let me go to Norah and then Brianna.

Q    Is this effort -- the White House talking about extending these tax cuts for those under $250,000 -- a way to distract from the poor job numbers last Friday?

MR. CARNEY:  No.  It's a way to focus on something that we all agree on, which is that these tax cuts for 98 percent of taxpaying Americans should be extended, and coming together around that rare consensus, voting yes to it, and having the President sign it into law. 

How could it be a reaction to something that happened a few days ago when it’s been the President’s position all along that these tax cuts should be --

Q    So on that very point --

MR. CARNEY:  -- extended for middle-class Americans.

Q    On that very point that it’s been the President’s position all along, in December 2010, when he advocated an extension of all of the Bush tax cuts, including those for the wealthiest of Americans, he argued that raising taxes would be a “blow to our economy.”  So what’s different from now from then?

MR. CARNEY:  The President’s position has always been that we should permanently extend the tax cuts for middle-class Americans and we should no longer extend the tax cuts for the wealthiest Americans.  At the time that you question, there was a package of proposals that passed that helped the economy at a time that it was very vulnerable and that the President signed into law.

What he made clear at the time was that he would not in the future support a measure that would extend tax cuts for the wealthiest Americans.  And it was a point made by independent economists and others at the time, and they’re making it again now, that when we’re talking about positive effects on the economy, it is tax cuts to middle-class Americans that produce that positive effect.  It is not tax cuts to the wealthiest Americans who tend not to spend that money as quickly or as readily as hardworking, middle-class Americans.

And the cost of extending those tax cuts -- $65 billion -- I’m talking about for the high end -- $65 billion for one year, close to a trillion over 10 -- is prohibitive, and we cannot afford it, and it does not work as a matter of macroeconomic policy.  We’ve seen what happened in the period from 2001 to 2008.  We saw the impact of those policy decisions.

Q    Okay.  And also in December, the President said that raising taxes on entrepreneurs who have money said that -- he said then, when entrepreneurs have money, it frees up “other money to hire workers.”  So why was the argument then that raising taxes on entrepreneurs would be bad and now it’s okay?

MR. CARNEY:  Well, first of all, you’re talking about apples and oranges.  As I’ve just made clear, the small business --

Q    But he said in December 2010 it would be a blow to the economy to raise taxes on individuals.  Now he says it’s not?

MR. CARNEY:  Look, as I just said, we’re talking 98 percent of the tax cuts -- 98 percent -- for 98 percent of the American people, he has always supported extending.  He supported it then.  He supported it now.  He --

Q    But in December 2010, he was worried about entrepreneurs.  He’s not now worried about entrepreneurs?

MR. CARNEY:  Of course he is, which is why he has passed small business tax cuts and signed into law small business tax cuts for I think 17 or 18 or 19 times.  It’s why he has put forward a proposal that Republicans could join Democrats in supporting this very week that would extend another tax break to small businesses if they hire -- make new hires or expand the wages of their employees.  The President is very concerned about that.

You’re buying into, again, the red herring argument that just isn’t true because -- and they can’t back it up -- that somehow the top 2 percent of America’s earners are all a bunch of small businesses when, in fact, the people who would be affected by this are -- that would identify themselves as small businesses under that definition, are largely hedge fund managers and law firm partners and others who file that way who tend to be doing much better than average, hardworking, middle-class Americans. 

Q    The Joint Committee on Taxation and Republicans have pointed out that about a million businesses would be affected by this, who file as Subchapter S corporations.  And so --

MR. CARNEY:  Again, I can repeat it, and I will, that we’re talking about 97 percent of small businesses -- 97 percent would not be affected.  The small businesses --

Q    Where is that figure from?

MR. CARNEY:  I’ll get you that.  I don’t have it in front of me.  But this is not a disputed notion.  I understand that -- I mean, there was a great piece done not long ago when this was a debate about -- *

Q    It is a disputed notion.  Republicans say something different.  It is disputed.

MR. CARNEY:  Well, I think you ought to ask them:  Would hedge fund managers who file that way, who make millions and millions of dollars potentially, benefit from this?  And are they one of the small businesses that they’re looking to support?  Would law firm partners who are doing very well but who file as a small business because they’re in a partnership, are they the small businesses that they’re so desperate to protect?  If they want to protect and assist small businesses, they ought to vote for the tax cut the President has put on the table and that will be voted on in the Senate this week.

I understand that this makes them uncomfortable, because one of the reasons we have a stalemate in Washington is because of their absolute intransigence, their refusal to even entertain the idea that the wealthiest Americans ought to do their fair share.  I mean, that’s why we don’t have a grand bargain.  It’s why we don’t have the comprehensive, balanced budget proposal that every independent commission that’s looked at it, made up of Republicans and Democrats, that everybody who takes these issues seriously has said we need to have, that the President himself has put forward in numerous proposals to Congress.  Because -- it’s because when the would-be Presidents in the Republican primary process were asked if they would support a proposal that had $1 in revenue increases for every $10 in spending cuts to a person, they said no.  And that is so far outside of the mainstream in terms of what makes -- what the American people support and what is common-sense economic policy that it has created this stalemate.

But one thing we can agree on is that middle-class Americans, 98 percent of taxpayers in this country, should have their tax cuts extended.  We cannot afford to extend them for the wealthiest taxpayers in America.  It didn’t work as economic policy, right? 

The tax rates that seem to concern those who are asking the question that you’re asking of me were in place at a time of record economic growth; at a time when the middle class did well and millionaires and billionaires did well; when mom-and-pop shops did well and large corporations did well; when folks on Main Street did well and people on Wall Street did well.  By contrast, when we put into place the Bush tax cuts, look what happened:  The middle class saw their incomes stagnate, and by the end of that eight-year period, we had the worst recession since the Great Depression.

Alexis.  Sorry, I think I did say -- Brianna, then Chuck, then Alexis.  Yes -- and sorry, Wendell, you too.

Q    Thanks.  To follow on Norah’s question about timing -- a Democratic source tells CNN that this announcement that the President made was actually moved up, which would give the appearance that it was to distract from the jobs numbers.  Was it moved up?

MR. CARNEY:  Not that I’m aware of.  I mean, it’s been the President’s position for a long time.  He believes that --

Q    Not the position, the sort of spectacle today of going before the cameras and saying something.  I mean, not -- obviously, this is his position, but going --

MR. CARNEY:  Having the President of the United States go forward and --

Q    This announcement, the actual -- what he said today.

MR. CARNEY: -- say what his position is and what he believes Congress ought to do has been the President’s position for a long time.  I have said it in my briefings and gaggles, that if the Congress were to pass a bill extending the middle-class tax cuts either temporarily or permanently tomorrow, the President would sign it tomorrow. 

And the fact is, the President in his announcement today is acknowledging what he’s been talking about out in the country, which is the stalemate has been making it very hard to get the necessary big things done that we need to get done, so we ought to focus on something that we all agree on, which is that we should extend tax cuts for the middle class.

Q    So that’s wrong, that the event was moved up in time?

MR. CARNEY:  Yes, I don’t believe it was scheduled for any other day.

Q    Okay.  And would he veto an extension that had a million-dollar threshold?

MR. CARNEY:  The President’s position, as he articulated today, and as he has made clear for many years now, is that tax cuts for 98 percent of Americans should be extended.  Those for the remaining 2 percent -- the wealthiest Americans, including millionaires and billionaires -- should not, because we can’t afford it and it doesn’t make good economic policy.

Q    But in 2010 he agreed to let --

MR. CARNEY:  Well, I addressed this.  I understand --

Q    -- and you said that on the $250,000.  On a million -- you said that he would veto on $250,000.  On a million, would he veto?

MR. CARNEY:  Look, I’m not going to take you -- the President’s position is clear.

Q    Well, you said he would veto on $250,000.  Will he veto on a million as well?

MR. CARNEY:  I said -- I was asked if he would not sign or veto a law that would extend all of the Bush tax cuts, including those for millionaires and billionaires, and the answer is he would not sign that.

Q    So would he not sign $1 million --

MR. CARNEY:  I’m not going to negotiate the particulars.  His position is clear.  It is for $250,000 -- 98 percent.  I mean, most of the people watching this -- and thank you for watching -- (laughter) -- will see their tax cuts stay where they are -- their tax levels stay where they are if we extend these tax cuts for middle-class Americans.  That’s the President’s position; it has always been the President’s position.

Q    But you say he wouldn’t sign extending all, and you won’t say the same about a million-dollar threshold.  It seems like --

MR. CARNEY:  But you could --

Q    Well, no, you’re staking out a claim on what --

MR. CARNEY:  I’m not -- no, I’m not.  Look, here’s what -- let me be clear.  I recognize that there are different positions -- that people have different positions on this.  But where everyone --

Q    But some of which you will agree to and some of which you’re not.

MR. CARNEY:  No -- where everyone agrees -- everyone that I’m aware of, in Congress as well as the President -- is that the tax cuts for middle-class Americans, up to earnings of $250,000 for a family, should be extended.  That’s the President’s position.  And the point he was making today is this is great -- here is something that we all agree on, that we all think is good for the American people, it’s good for the American economy.  Let’s do it.  Understanding that we have a stalemate here on some of these bigger issues, let’s do something that we all agree on.  That’s the President’s position.

Q    So you’re leaving the door open on a million?

MR. CARNEY:  I’m not.  (Laughter.)  I’m not.

Q    So there is no door open?  There’s no --

MR. CARNEY:  No.  The President’s position is clear.

Q    He would not sign?

MR. CARNEY:  He announced today what his position is.

Yes -- sorry, Chuck, and then Wendell.  Chuck first.

Q    Oh, I just -- can you actually clear up, there is a difference between vetoing and not signing.

MR. CARNEY:  He would veto.

Q    He would veto an extension --

MR. CARNEY:  An extension of the upper-income Bush tax cuts.

Q    Okay.  And I think I heard you twice now -- are you directly correlating the Great Recession with the Bush tax cuts?
MR. CARNEY:  No.  I think that the policies of that administration contributed mightily to what became known as the Great Recession -- the worst economic crisis since the Great Depression.  Not just the tax cuts, maybe -- I mean, in terms of our fiscal picture, two wars that weren’t paid for didn’t help; a Medicare expansion that was unpaid for didn’t help.  There were a lot of contributors. 

But what is absolutely the case -- and I think you’ve covered it, too, Chuck -- was that the campaign for those tax cuts was mounted on the idea that it would be beneficial for every American, for the whole American economy.  And now that -- with the benefit of hindsight, we know that’s not what happened.  And in fact, that the period before that, when wealthier Americans paid a higher rate -- not a historically high rate by any means, but a higher -- a slightly higher rate, the economy did significantly better. 

And of course there are different factors that contribute to that.  But we know that this policy did not work.  It just did not work -- because even before the crisis, even before things began to go really south in 2007, you had a situation where middle-class incomes were stagnating, where we had the slowest job creation of any expansion in recent memory.  So something wasn’t working, and those economic policies were not working.

Q    So the President today, he said, let’s not hold the middle class tax rates hostage to the wealthy.  How, by issuing a veto threat -- if they all came to your desk, for all of the extension -- is that not the -- are you --

MR. CARNEY:  But the point is --

Q    I’m just saying, is it -- could the same -- could they -- could the Republicans say the same thing about the President, that he’s holding the same tax cuts hostage to the wealthy?

MR. CARNEY:  But here’s the point -- and I think the President was making this very clearly earlier today, is that there is a great deal of disagreement about whether or not the wealthiest of Americans should see their tax cuts extended at the cost of $65 billion for one year, over $800 billion over 10; hundreds and hundreds of billions more if you did it permanently as the way -- as some Republicans would have us do it.  There is no debate about this.

So I don't think there’s an issue of extending all of the Bush tax cuts.  The issue is can we find something here that we all agree on that's good for the economy and good for the American people.  And that is extending the tax cuts for 98 percent of American taxpayers.  That's what the President talked about today.  He’s saying, let’s be realistic about the stalemate that we have here because of this position that Republicans have taken that nothing moves unless millionaires and billionaires and the wealthiest Americans get their tax cut.

Q    So this is about decoupling.  This is about decoupling the middle class from the upper income so that there’s two separate debates --

MR. CARNEY:  Well, I mean, that's one way --

Q    -- because of political leverage, the other side has had too much leverage under this?

MR. CARNEY:  No, that's one way to look at it.  It’s because we all agree that -- the President disagrees.  He does not believe that extending tax cuts for millionaires and billionaires is good economic policy.  Democrats don't believe that it’s good economic policy.  He does believe that it’s good economic policy to extend the tax cuts for 98 percent of taxpaying Americans, and so do Republicans.  So let’s do that.  And if supporters of extending tax cuts for wealthier Americans want to have the debate about that, we should and we will.  That's in many ways one of the most dominant issues of this campaign thus far.  And I'm sure it will be going forward.  And there is great disagreement. 

And as the President says, there's a stalemate -- that's the bad news.  The good news is that the American people get to resolve the stalemate on those issues.  On the issue of extending middle-class tax cuts, there isn't disagreement, so let's extend them.

Q    The Egyptian President -- do you have anything to confirm right now as far as when President Obama is going to meet with him?

MR. CARNEY:  The President will be going to UNGA, the United Nations General Assembly, in September.  And he will, I'm sure, encounter a number of leaders.  After all, that's a gathering of world leaders, including the new Egyptian President there.  He is not -- there are no --

Q    There are no planned --

MR. CARNEY:  There are no planned bilateral meetings in Washington around UNGA with any leader. 

Q    Here in Washington, but --

MR. CARNEY:  Correct, or there.

Q    -- there -- but that could change -- could anything change in Washington?

MR. CARNEY:  No.  I mean, there's nothing planned.  The President looks forward to meeting the new President of Egypt at UNGA.  They have not met, and they will both be participating at the UN General Assembly.  That is really the only issue here in terms of the reports. 

Q    So they will have a one-on-one in some form or that's not 100 percent?

MR. CARNEY:  No, no, there's nothing scheduled like that.  It's just, they will meet. 

Q    Encounter each other.

MR. CARNEY:  Encounter each other.

Q    Jay, the President said one of the reasons for today's proposal was to provide certainty for the middle class.  Where's the certainty in a one-year extension?

MR. CARNEY:  Well, the President very much supports permanent extension of tax cuts for middle-class Americans.  Under his presidency, he has lowered taxes for middle-class Americans every year he has been in office.  But the proposal today to extend it for one year recognizes that there are broader issues of tax reform that are highly contested, that unless there's a real break in the logjam will not be resolved before the election. 

So a one-year extension provides certainty for a year, it does a great benefit for the economy, and it saves the money that every baseline that your news organization relies on assumes will be spent on tax cuts for the higher-income Americans.  And it leaves until later the bigger issues -- a broader tax reform, which the President supports, and of a balanced approach to medium- and long-term deficit reduction.

Q    And on Norah's question, in 2010, the President said, a bad time to raise taxes, at a time when growth was substantially higher than it is right now.  So I must assume that now is a good time to raise taxes on the wealthier Americans, because he doesn't have as part of the deal the extension of jobless benefits and the extension of the payroll tax cut. 

MR. CARNEY:  I think I addressed this.  The President believes, as do independent economists, that as a matter of macroeconomic policy, what's good for the broader economy -- extending tax cuts for the middle class, 98 percent of taxpaying Americans -- is good for the economy.  Under any scenario, the positive impact of extending them for higher-income Americans is greatly outweighed by the expansion in the deficits that's brought about by extending them.  He does not believe that is good economic policy.  At the time --

Q    But he spoke, at the time, to growth at the time.  And at the time, growth was almost twice as high as it is right now.

MR. CARNEY:  His broader point was about the tax cuts for 98 percent of the American people, not for the 2 percent at the higher end.  The fact was, at the time that was what could be agreed on then.  Right now, where we have agreement -- where we all agree, where the President agrees with every Republican and Democrat in Congress that I know of -- is that tax cuts for 98 percent of the American people ought to be extended. 

So let's pass that and sign it, and continue to have the debate about whether it makes good economic sense to extend tax cuts for those making more than $250,000 -- including millionaires and billionaires, whom this President believes do not need the tax cut at a time when we need to get our fiscal house in order.

Q    And where is he on the payroll tax rate right now?  Does he support another extension of that?

MR. CARNEY:  The payroll tax cut is a temporary measure, as we made clear at the time and made clear at the extension, is it's far too early at this point to say what -- whether the payroll tax cut that was put in place for one year and then extended for a year is something that we would look at in December.  So it’s not -- this is a separate issue from the income tax rates that are the focus of the middle-class --

Q    So you’re not willing to say now, let the payroll tax cut expire in December?

MR. CARNEY:  I’m not.  No, because that's -- that was a -- look, the President’s position again on the broader middle-class tax cuts is that they should be made permanent, that those rates should be made permanent.  Recognizing the stalemate that's in Washington, he proposed extending those tax cuts for the middle class for one year to create economic certainty for them, and to create a positive effect for the broader American economy.

The payroll tax cut is a temporary measure, and it was extended at the end of last year and early this year because the economic circumstances demanded it.  And it’s obviously a very controversial issue, as we saw, because of the great reluctance displayed by Republicans for week after week after week to extend the payroll tax cut.  And the President’s point today is, let’s acknowledge that the contentious issues are going to be hard to resolve now, but we should be able to do something on an issue that we all agree on, which is extending the middle-class tax cuts.

Alexis, then Margaret.

Q    Jay, can we go back to sequestration for a second?  Thousands and thousands of workers are going to get pink slips who work with the government in some private contractors, small businesses, because their companies are going to be obligated to give them those pink slips sometimes 90 days before the sequestration goes into effect -- or it could be longer, depending on their policies.  But you were just saying that the President would be content to leave that until much later in the year.  So this has a direct job impact, the sequestration --

MR. CARNEY:  He would not be content, Alexis.  That's your word.  I think that the President would -- if there was a willingness by Congress --

Q    Okay, so that's my question.  That's my question --

MR. CARNEY:  -- to do what everybody says it should do, which is recognize that the sequester imposes policies that nobody wants.  And by definition, it’s a forcing mechanism to get Congress to make tough choices -- in this case, to deal with our medium- and long-term deficit issues with a balanced plan.  The President would -- again, would welcome a breakthrough right now.  He certainly thinks that would be positive for the economy.

Q    So my question was, if the President was eager today to talk about a one-year extension as a way to try to mitigate one part of the disagreement, because there is some meeting of the minds, there’s also some meeting of the minds about sequestration, right?  And there’s been proposals to temporarily extend.  So my question was, will the President today or this week also say, come talk to me, let’s do a temporary extension?

MR. CARNEY:  Look, the President today was talking about tax cuts.  I don't have anything speculative for you about sequestration except we all know what we need to do.  There is -- the point of the sequester -- and remember Republicans voted for this, as well as Democrats -- was to force Congress to make some tough choices, and that meant tough for everybody -- not just tough for one side -- to implement the kinds of policies that would get our fiscal house in order over the long term.

And that requires a balanced approach.  It requires hard choices for Democrats and Republicans.  It requires significant non-defense, discretionary cuts; cuts in programs that affect a lot of people -- and the President has signed into law substantial, nondefense, discretionary cuts.  It requires reforms to our entitlement programs that make them stronger, and reforms that would help the bottom line and help our economy.  And it requires an approach to taxes that says that everyone should get a fair shot and everyone should do their fair share. 

And that’s been the holdup -- that last part -- a refusal to do anything on dealing with the sequester, on tax reform, on our overall budget issues because of this broadly uniform position that they won’t do anything if we don't give more tax cuts to the wealthiest Americans, which just -- it’s not good policy.  We saw that.  We can't afford it.  We know that.

Proposals put forward by Republicans in Congress and the broader Republican Party, including the nominee -- likely nominee for President would make the situation much worse in terms of deficits and debt.  They would almost without question result in tax hikes for the middle class.  This is just bad policy. 

So we need to -- again, recognizing that there’s a debate about this, and a stalemate that the American people will settle in November, let’s focus on the things that we agree on -- and one of them is that we should extend these tax cuts for middle-class Americans.  That's what the President wants to do.

Margaret.

Q    Thanks.  I have one domestic and one foreign policy.  On the domestic, by pressing now, does the President believe that there’s a good chance that he can get this extension done before the election?  And if so, why?  Is it because he thinks that Republicans will be sort of pressured into a situation where you’re on the campaign trail?  Or what’s the argument for why this approach would get this done now instead of at the end of the year?

MR. CARNEY:  Well, again, it’s not -- it is not everything that we would need to do.  And the reason why he separated this out and said, let’s do this now, is because he does believe there’s a broad consensus on the need to extend these tax cuts for the middle class.  And hopefully, the Republicans will come to that conclusion as well. 

And we’ve had this discussion in the past when I’ve been up here, as well as on the road, about what tactics by the President result in positive momentum legislatively.  And what we’ve seen in the last year or so -- or in the last six months or so -- especially the last 10 or 12 months, is that when the President makes a public case for policy that is sensible, that is broadly supported by the American people, and he continues to make that case, that we see the kind of movement that initially seems unlikely in Congress.  And that will hopefully be the case here.

Q    But in time -- 

MR. CARNEY:  But it doesn’t have to be -- well, I don't know.  I mean, I think it depends on --

Q    -- the convention, when --

MR. CARNEY:  Tomorrow.

Q    Tomorrow?

MR. CARNEY:  Why not?  No, I mean, seriously.  There are those who will say it's never going to happen because the Republicans won't extend tax cuts for the middle class unless we extend tax cuts for the wealthiest Americans.  And there are those who say that the Republican position of refusing to support tax cuts for the middle class is a very untenable position.  We'll see. 

I think it's untenable.  I think it’s hard -- it's a tough one to explain, why you'd vote no for extending tax cuts for the middle class when to most people you'd have that conversation with, it would be nonsensical.  But you're not going to do that?  You're going to make my taxes go up on average $2,200 on January 1st, just because you insist that somebody who makes $1 million or $2 million or $10 million a year should get a tax cut, too? 

Let's have the debate about the high-income stuff later, because we know we disagree on that.  We all agree that 98 percent of Americans ought to have their taxes cut again on January 1st.

Q    On the foreign policy question -- I just wanted to follow up on the non-meeting meeting with the Egyptian President.  So what came out yesterday from Cairo following Burns’ meeting with Morsi was that they would have a meeting at UNGA.  What you're saying now -- I just want to make sure I understand -- is that it won't be like a real-meeting meeting -- it won't be a bilateral?  They will --

MR. CARNEY:  Let me just be clear.  There was one report that I think overstated this.  I expect that the President will have a chance to meet with or see President Morsi at the UN General Assembly.  We haven't worked details out of that, but we expect that he will be able to see him. 

And this goes to I think Chuck's question -- there hasn't been anything worked out and there is no bilateral session planned here with any -- it's not about Egypt, but with any leader.  Nobody -- they have a lot of world leaders coming to the United States -- to the United Nations.  The President has no bilateral meetings planned here in Washington around that.  He will obviously see many world leaders while he is up at the United Nations, including, he hopes, the new President of Egypt. 

Q    Is part of -- maybe you can sort of peel back then -- is part of it that the President wants to sort of see Morsi in action a little bit more before he commits to a bilateral meeting?  Or what's kind of the politics of how that works?

MR. CARNEY:  Let's be clear -- I don't have any bilateral meetings with foreign leaders to announce -- with any foreign leader.  He --

Q    Well, it was announced.  I mean, it was --

MR. CARNEY:  It wasn't announced. 

Q    I mean, it was -- well, it actually was.  I mean, it was announced by the Egyptians.

MR. CARNEY:  It was a letter in which -- again, we don't have a habit of reading out presidential correspondence.  But look at what the Egyptians said.  The President looks forward to seeing President Morsi in New York at the United Nations General Assembly.  He will see many leaders there, but many of whom he has met already.  He has not met President Morsi.

Mark.

Q    Thanks, Jay.  You've been clear that the President's position on the $250,000 threshold is a long-held position.  I'm wondering, though, whether the President muddied the message a little bit by so aggressively advocating on behalf of the Buffett tax over the past several months, which obviously sets a threshold of a million dollars a year for a minimum marginal tax rate.  Why would it make sense to have $250,000 be the proper cutoff for an extension of a tax cut, but a million be the proper threshold for the imposition of a minimum marginal tax rate?  Why are those two different?

MR. CARNEY:  Well, there are different ways to answer that question.  Some of them go to economic policy.  The Buffett Rule is a matter of principle that would guide a broader tax reform -- approach to tax reform.  And we made that clear.  What Warren Buffett said, and what the President supports, is that it is -- does not make sense and it does not seem fair that someone like Warren Buffett, who is a billionaire, would pay taxes on his income at a lower rate than his secretary or somebody like his secretary.  The President agrees with that principle. 

The Bush tax cuts, the so-called tax cuts, are concrete law the President has long supported.  They expire.  The concrete -- the President has long supported extending and making permanent the Bush tax cuts, the middle-class tax cuts, for 98 percent of taxpaying Americans.  And that is reflected in the announcement he made today, recognizing that there is a lot of debate and disagreement over tax policy in Washington and on the campaign trail, and that getting broader tax reform done, getting broader issues resolved would be very hard.

But here's one thing we can all agree on, is that we need to extend these tax cuts for 98 percent of taxpaying Americans, for hardworking Americans.  And it's not just let's reward -- let's just do that because it's 98 percent and it's middle class and we're all for that.  It's good economic policy, because we know and you know -- and if you talk to an economist, they'll tell you -- that tax cuts for Americans making less than $250,000, and especially for those solidly in the middle class who are making ends meet every week and every month, giving them tax cuts, more money in their pocket and not raising their taxes is good in terms of direct positive impact on economic growth in the near term. 

And there's a real difference there between -- in terms of the macro issues, the economic growth issues, between tax cuts for middle-class Americans and tax cuts for the wealthiest of Americans.

Q    And one quick follow up -- did the White House consult with Nancy Pelosi, Chuck Schumer and others who were on the record for a million as the threshold prior to the President's announcement today?

MR. CARNEY:  Yes, and we consult with Democratic leaders in the Senate and the House all the time.  I don’t think it came as a surprise to anyone -- Republican or Democrat in Congress -- that the President supports extending tax cuts for middle-class Americans.  But the short answer is yes. 

Q    Thanks, Jay.  Does the President still believe Kofi Annan is capable of convincing President Assad of accepting the ceasefire?  And does he consider this last visit as a last-ditch effort to solve this diplomatically?

MR. CARNEY:  Well, as Secretary Clinton said and I’ll echo, there is not a lot of time here.  President Assad’s behavior has been heinous, and we judge him by his actions, not his words. 

The President does support Kofi Annan’s mission, does support the plan that Mr. Annan has put forward -- because we need that transition for the benefit of the Syrian people.  And it is not one person alone who will bring about that transition in Syria, certainly not Kofi Annan. 

I mean, President Assad -- if he would finally do the right thing and step aside -- could help facilitate it more than any one individual could.  The fact is, is that there’s broad international support for Kofi Annan’s plan, and it is that pressure that we believe and we hope will ultimately lead to a political transition in Syria that creates a better future for the Syrian people.  And that future cannot happen with Assad still in power, in our view.

Yes, April.  And then -- sorry, what’s -- you’re next.

Q    Jay, President Obama has many hats.  And in the four months leading up to November as President -- not as campaigner, but as President -- what can the American public expect to see from him in these last four months before the election as President, not as campaigner?

MR. CARNEY:  Well, I think you saw today the one thing that he wants to get done as President with the help of Congress is an extension of tax cuts for 98 percent of the American people, middle-class tax cuts.  There are still a number of issues that we can get done that will benefit the economy and benefit job creation if we get some cooperation out of Congress.  Sometimes you hear people say, we need a plan, we need to see a plan for dealing with the economy and job creation right now -- and the President, as you know, put forward that plan, the American Jobs Act.  Some elements of it were passed by Congress, including the extension of the payroll tax cut, but many of those elements were not passed.

And outside, independent economists have analyzed those elements -- those un-passed elements of the American Jobs Act -- and said that they would lead to the creation of a million jobs very quickly.  And that’s why Congress ought to act on that.  Assuming that everyone on Capitol Hill is concerned with the need to have the economy grow faster and have it create more jobs faster as the President is.

So the President is going to push these issues every day, and you’re right -- he’s campaigning for reelection, but he’s President of the United States every day, and he is interested in making progress on the core issues -- economic growth and job creation -- wherever he sees possible. 

And the question I didn’t get, but I thought might is, well, isn’t this -- Republicans are saying this proposal today is political.  And my answer to that would be, well, take it away from him.  Deprive him of the political benefit by passing it and signing -- and getting it signed into law.  And then everybody can go on and discuss other issues.  Because he knows that would be good for the American people and good for the economy.  So nothing would make him happier than Republicans in Congress voting in the way that they say they believe, which is that 98 percent of Americans ought to get their tax cuts extended in January.

Victoria.

Q    On Syria --

MR. CARNEY:  Jim, and then you’re next.  Victoria, and then -- sorry.

Q    On Syria, you just said there’s not a lot of time here.  Not a lot of time before what?

MR. CARNEY:  Well, as we’ve seen -- I appreciate the question -- and as I’ve said in the past, the situation in Syria continues to deteriorate because Assad refuses to stop brutally assaulting his own people and murdering them.  The risk, as we’ve said in the past, is that that situation will dissolve into a broader, sectarian civil war -- they could have broader implications for the region, could involve other nations.  That’s obviously a terrible outcome for the world as well as the Syrian people. 

That is why it is so essential that the international community come together in support of the Annan plan and in support of the basic principle that Syria’s future can only be brighter if a brutal dictator who has overseen the massacre of his own people in these past 14 or 15 months steps aside and is no longer a part of the Syrian government.

Q    And yet, the first point of the Annan plan, which is ceasefire, isn’t even working.

MR. CARNEY:  Well, there’s no question, as we’ve said, that Assad has refused to live up to his own commitments, not for the first time.  And that’s why whenever Assad says something that sounds good, sounds like progress, we remain highly skeptical because we in the world have seen that he routinely fails to live up to his obligation, that he routinely fails to keep his promises, that he makes promises about implementing a ceasefire or creating some progress, and then continues to brutally assault his own people.

So we have said and have been quite clear about the fact that we’re skeptical about Assad’s intentions.  That’s why he has to go, in our view.  He long ago gave up any claim he might have had to being a participant in a transition to a better future for Syria.

But look, we’re working with our international partners.  You saw in recent meetings that the opposition is coming together, that the international consensus is growing.  And we will continue to press on every front to bring about a transition in Syria that will produce a future that the Syrian people -- or give Syria a chance to produce a future that the Syrian people deserve.

Q    One final question.  Do you believe there is any international mechanism for producing a result in Syria without Russia and China?

MR. CARNEY:  We’ve made very clear that Russia and China and the United States have disagreements about Syria, and that we strongly disagree with the vetoes that those countries put forth on measures before the United Nations Security Council. 

We continue to have discussions with the Russians and the Chinese in a very blunt and clear fashion about why we think we need to come together around the proposition that a transition needs to take place -- and there’s agreement on that -- and that that transition cannot include Assad.  And we are continuing to have conversations with the Russians about this. 

And our fundamental point is, Russia’s -- it is in nobody’s interest to stand by Bashar al-Assad.  That’s our point to those in his inner circle, to those in the military and governmental leadership.  We have seen a great number of defections, including a recent high-level military defection, somebody from Assad’s inner circle. 

And it is our message internationally that it doesn’t make sense, as a matter of self-interest for any nation to stand by an international pariah.  And it doesn’t make sense for the future relations of any country with the Syrian people to stand by Assad. 

I think Jim, I owe you one.

Q    (Speaks in Russian.)

MR. CARNEY:  (Speaks in Russian.)

Q    (Speaks in Russian.) 

With the federal debt approaching $16 trillion, does the President’s call for continued tax cuts for 98 percent of Americans, as he repeatedly said today, and thus preventing huge revenue increases that would help reduce the debt -- does that represent an acknowledgement by him that the economy is still doing poorly and that his previous steps to boost it have not worked?

MR. CARNEY:  The President says all the time, as recently as Thursday and Friday, that the economy is not where it needs to be.  While we have made progress, we are nowhere finished with the job of digging out of the worst recession since the Great Depression.  Nobody is satisfied with economic growth below where we want it to be and job creation below where we want it to be. 

We have 28 straight months of private sector job creation -- 4.4 million private sector jobs.  And that would be -- that is progress.  And that would seem like even greater progress if we hadn't created -- if the situation that we inherited didn't result in the loss of more than 8 million jobs; if we didn't have a situation where in the fourth quarter of 2008, before this President took office, the economy shrank by nearly 9 percent.  I mean, think of that.  The GDP shrank by nearly 9 percent in one quarter.  So we have a long way to go, and the President makes that clear all the time. 

Now, in terms of the benefits of extending the middle-class tax cuts -- this President's position all along -- we need to follow policies that help the middle class grow, create security for the middle class.  The President's whole economic vision is premised upon the idea that we grow from the middle class out.  We don't trickle down from the top and hope that the middle class benefits.  That maybe once sounded like sensible economic policy, but it's been implemented and it didn't work.

So what does work are policies that focus on creating more security for and expanding the middle class, and that's what the President has been focused on.  The fact is, is that every baseline -- to go to your point about the deficit -- that your news organizations rely on in terms of what the deficit looks like in years going forward assumes the extension of all the tax cuts.  And by not extending tax cuts for the wealthiest Americans, we actually save $65 billion in this one year, over $800 billion over 10, close to a trillion if you include everything. 

And that's the right economic policy.  We need to take measures that help the middle class.  We need to ask the wealthiest Americans to do their fair share.  And that's the President's belief.  Thanks.

END
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