President Obama's budget chief hinted that the president's signature campaign issue - a middle class tax cut - will not likely survive a budget battle with Democrats on Capitol Hill.
On a conference call with reporters in advance of the President’s trip to the hill to speak before the Senate Democratic caucus, OMB Director Peter Orszag indicated that while 98% of the budget mark-ups in the House and Senate are on par with the administration’s budget blueprint, some campaign trail promises, like middle class tax cuts, may get left on the cutting room floor.
The administration had tied the revenue raised from cap-and-trade to the Making-Work-Pay tax credit for families – both of which have been brought up as possibilities to be scrapped from the Senate and House budget resolution.
President Obama ensured his middle class tax cut is locked in place for the next two years as a part of the stimulus package he signed into law last month, but OMB Director Peter Orszag told reporters today that the White House will have to use those two years to figure out how to keep that tax cut in place for middle class families beyond 2010.
“We have two years to figure this out,” Orszag told reporters, pitching the anticipated formation of the President’s Recovery Advisory Board led by Former Federal Reserve Chairman Paul Volker which will examine ways to provide funding for making-work-pay.
In an interview later with ABC News, Orszag said that the changes made to the president’s budget blueprint were inevitable, “Yes, on cap and trade and with regard to making work pay the tax credit that will be there for two years there's going to be some adjustment. But those were inevitable. There was always going to be some changes made.”
Orszag said of course the administration was aware that not “every single comma, decimal point and period was going to be embodied in the budget resolution,” but the modifications that have been made on the hill – they believe – are slight.