English subtitles for clip: File:12-5-12- White House Press Briefing.webm
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1 00:00:04,400 --> 00:00:05,400 Mr. Carney: Thanks for being here. 2 00:00:05,400 --> 00:00:06,400 Good afternoon. 3 00:00:06,400 --> 00:00:09,767 I, as you can see, have brought a guest. 4 00:00:09,767 --> 00:00:14,399 Jason Furman is the Principal Deputy Director of the National 5 00:00:14,400 --> 00:00:15,533 Economic Council. 6 00:00:15,533 --> 00:00:18,066 He is also an assistant to the President for economic policy. 7 00:00:18,066 --> 00:00:21,232 He's somebody that many of you are familiar with. 8 00:00:21,233 --> 00:00:24,000 In the last several days in particular we've had a lot of 9 00:00:24,000 --> 00:00:27,633 questions and a lot of conversation about the issue 10 00:00:27,633 --> 00:00:33,934 of revenue, and how we achieve significant revenue as part of a 11 00:00:33,934 --> 00:00:36,367 broad deficit reduction package. 12 00:00:36,367 --> 00:00:41,000 It is the President's position, as you know, that we need to 13 00:00:41,000 --> 00:00:44,667 have income tax rates on the highest earners in America, 14 00:00:44,667 --> 00:00:47,500 the top 2 percent, rise. 15 00:00:47,500 --> 00:00:52,433 And in addition to that, to pass policies that he has long 16 00:00:52,433 --> 00:00:55,834 proposed that would limit deductions and close loopholes 17 00:00:55,834 --> 00:00:57,233 for wealthy earners. 18 00:00:57,233 --> 00:01:00,433 And the combination of the revenue accomplished through 19 00:01:00,433 --> 00:01:04,200 that reaches the target that is necessary to achieve the kind of 20 00:01:04,200 --> 00:01:06,767 broad-based $4 trillion deficit reduction that 21 00:01:06,767 --> 00:01:08,834 the President seeks. 22 00:01:08,834 --> 00:01:12,700 There's been some discussion about whether or not significant 23 00:01:12,700 --> 00:01:17,033 amounts of revenue can be accomplished through just 24 00:01:17,033 --> 00:01:21,567 closing loopholes and capping deductions. 25 00:01:21,567 --> 00:01:24,934 Jason has done some work on this and for that reason I've asked 26 00:01:24,934 --> 00:01:25,934 him to come here today. 27 00:01:25,934 --> 00:01:30,500 He'll make a little presentation and then take your questions. 28 00:01:30,500 --> 00:01:31,834 Mr. Furman: Thanks, Jay. 29 00:01:31,834 --> 00:01:35,367 So I just briefly wanted to give a tiny bit of context, then walk 30 00:01:35,367 --> 00:01:40,400 you through a tiny bit of math that can be a little bit boring 31 00:01:40,400 --> 00:01:44,066 but is very important because it explains where we're coming from 32 00:01:44,066 --> 00:01:46,900 and where the President is coming from on this issue. 33 00:01:46,900 --> 00:01:52,066 The context is we're trying to cut the deficit by $4 trillion 34 00:01:52,066 --> 00:01:54,567 over the next decade, including what we did 35 00:01:54,567 --> 00:01:56,232 in the Budget Control Act. 36 00:01:56,233 --> 00:02:00,066 That's the amount that you need to do in order to stabilize the 37 00:02:00,066 --> 00:02:04,033 debt and get the debt to start to be on a downward path as a 38 00:02:04,033 --> 00:02:05,033 share of the economy. 39 00:02:05,033 --> 00:02:08,265 And that's ultimately the economic goal that 40 00:02:08,265 --> 00:02:13,000 the President has in a debt reduction agreement. 41 00:02:13,000 --> 00:02:17,567 In the President's plan, $1.6 trillion of that $4 trillion 42 00:02:17,567 --> 00:02:22,500 that we need would come from additional revenues. 43 00:02:22,500 --> 00:02:26,200 And it would come from a combination of allowing the 44 00:02:26,200 --> 00:02:29,266 rates on high earners to go back up to what they were under 45 00:02:29,266 --> 00:02:35,132 President Clinton, and reducing the value of tax deductions and 46 00:02:35,133 --> 00:02:38,367 other tax benefits that they get. 47 00:02:38,367 --> 00:02:41,700 Before I get to how much can be raised by the second, let me 48 00:02:41,700 --> 00:02:46,466 just say the President is very, very supportive of curbing tax 49 00:02:46,467 --> 00:02:48,734 deductions for high-income households. 50 00:02:48,734 --> 00:02:52,467 It's been a part of his plan from his very first budget. 51 00:02:52,467 --> 00:02:57,700 In fact, he was and remains the only major leaguer in Washington 52 00:02:57,700 --> 00:03:03,299 that has put forward a specific, explicit plan that would limit 53 00:03:03,300 --> 00:03:06,000 those tax benefits for high-income households 54 00:03:06,000 --> 00:03:09,967 that's been examined by the Joint Committee on Taxation, 55 00:03:09,967 --> 00:03:14,700 which is the official referee for these issues in Congress. 56 00:03:14,700 --> 00:03:17,299 That plan, though, doesn't raise the revenue that you need. 57 00:03:17,300 --> 00:03:21,734 So out of the President's $1.6 trillion, $950 billion 58 00:03:21,734 --> 00:03:23,266 comes from decoupling. 59 00:03:23,266 --> 00:03:26,299 Decoupling is the high-income rates going away, 60 00:03:26,300 --> 00:03:29,166 the middle-class tax cuts becoming permanent. 61 00:03:29,166 --> 00:03:32,367 That gets you $950 billion of revenue. 62 00:03:32,367 --> 00:03:36,934 The question is could you plausibly replace that revenue 63 00:03:36,934 --> 00:03:39,734 just by limiting tax expenditures. 64 00:03:39,734 --> 00:03:42,533 There have been lots of different ideas out there. 65 00:03:42,533 --> 00:03:45,132 It's always a little bit like Jell-O -- you look over here, 66 00:03:45,133 --> 00:03:47,166 the problem with this one; well, how about this one; the problem 67 00:03:47,166 --> 00:03:50,734 with that could fix this, and you go back to the first one. 68 00:03:50,734 --> 00:03:52,934 Most of them -- in fact, none of them that I've seen have been 69 00:03:52,934 --> 00:03:55,233 scored, as I said, by the official referees at the 70 00:03:55,233 --> 00:03:56,934 Joint Committee on Taxation. 71 00:03:56,934 --> 00:03:59,867 But I'll just quickly take you through one that Gene Sperling 72 00:03:59,867 --> 00:04:03,367 and I did a blog post on last week, and it's been the one 73 00:04:03,367 --> 00:04:06,132 that I think we've heard the most in the public debate, 74 00:04:06,133 --> 00:04:09,200 which is let's take the idea that you could take everyone's 75 00:04:09,200 --> 00:04:13,132 tax deductions, limit them to $25,000. 76 00:04:13,133 --> 00:04:16,066 If you have more than $25,000 in deductions you wouldn't get 77 00:04:16,065 --> 00:04:18,200 to take those extra deductions. 78 00:04:18,200 --> 00:04:19,834 It sounds like a reasonable idea. 79 00:04:19,834 --> 00:04:23,266 It sounds like most middle-class families wouldn't be affected -- 80 00:04:23,266 --> 00:04:25,567 $25,000 is quite a lot. 81 00:04:25,567 --> 00:04:27,233 And it's been claimed that it could raise over 82 00:04:27,233 --> 00:04:28,233 a trillion dollars. 83 00:04:28,233 --> 00:04:31,300 So could you do that instead of what we're talking about? 84 00:04:31,300 --> 00:04:32,633 Well, then you start to look at the idea. 85 00:04:32,633 --> 00:04:36,900 It turns out 17 million middle-class families would 86 00:04:36,900 --> 00:04:40,032 see their taxes go up as a result of this proposal, 87 00:04:40,033 --> 00:04:42,200 households that make -- married couples that make 88 00:04:42,200 --> 00:04:44,366 below $250,000. 89 00:04:44,367 --> 00:04:48,100 Forty percent of the revenue in this plan would come from those 90 00:04:48,100 --> 00:04:49,500 middle-class families. 91 00:04:49,500 --> 00:04:52,700 The President doesn't want to raise taxes on those families. 92 00:04:52,700 --> 00:04:56,667 So you fix it -- you start at $250,000 and now the proposal 93 00:04:56,667 --> 00:04:58,265 only raises $800 billion. 94 00:04:58,266 --> 00:05:05,600 But it has a cliff: When your income goes from $249,999 to 95 00:05:05,600 --> 00:05:09,700 $250,000, your tax bill could jump way up. 96 00:05:09,700 --> 00:05:12,133 You can't have features in the tax code like that. 97 00:05:12,133 --> 00:05:15,032 It's something no one would ever want to write in. 98 00:05:15,033 --> 00:05:18,066 You protect against that cliff with a phase-in; now you're down 99 00:05:18,066 --> 00:05:21,799 to only $650 billion of revenue. 100 00:05:21,800 --> 00:05:25,133 Now let's look at it from a public policy perspective: 101 00:05:25,133 --> 00:05:28,066 $25,000 -- if you're a high-income household, 102 00:05:28,066 --> 00:05:30,532 there's a good chance your mortgage interest alone is 103 00:05:30,533 --> 00:05:32,333 going to be $25,000. 104 00:05:32,333 --> 00:05:34,667 Certainly once you take your mortgage interest and your state 105 00:05:34,667 --> 00:05:37,799 and local deduction, you've used that entire thing. 106 00:05:37,800 --> 00:05:40,367 That means you're not getting any incentive 107 00:05:40,367 --> 00:05:41,367 to give to charity. 108 00:05:41,367 --> 00:05:43,300 There's no reason for you to keep your receipts when you 109 00:05:43,300 --> 00:05:46,433 give to charity, no reason to turn them into the IRS. 110 00:05:46,433 --> 00:05:50,000 You've used your whole cap just on those other items. 111 00:05:50,000 --> 00:05:52,967 You look at the top 1 percent of households in this country -- 112 00:05:52,967 --> 00:05:57,866 under this proposal, 97 percent of them would lose any incentive 113 00:05:57,867 --> 00:06:02,333 at all to give additional money to charity. 114 00:06:02,333 --> 00:06:05,000 These are households that are responsible for one-third of 115 00:06:05,000 --> 00:06:06,567 tax-deductible giving. 116 00:06:06,567 --> 00:06:08,967 You take away their charitable deduction completely, you're 117 00:06:08,967 --> 00:06:13,133 going to get $10 billion less a year going into charity 118 00:06:13,133 --> 00:06:16,734 according to the types of estimates CBO has done. 119 00:06:16,734 --> 00:06:22,233 Fix the charity -- you're now down at $450 billion; $450 120 00:06:22,233 --> 00:06:24,934 billion is a meaningful contribution to deficit 121 00:06:24,934 --> 00:06:28,633 reduction, it could be a meaningful part of tax reform. 122 00:06:28,633 --> 00:06:32,066 It doesn't get you anywhere close to the amount of revenue 123 00:06:32,066 --> 00:06:36,032 you're going to need to satisfy what it is the President has 124 00:06:36,033 --> 00:06:38,767 called for and to have a balanced plan that at the end 125 00:06:38,767 --> 00:06:43,332 of the day is going to get $4 trillion of deficit reduction. 126 00:06:43,333 --> 00:06:46,500 I won't walk you through the 18 other ideas that have been 127 00:06:46,500 --> 00:06:50,767 floated in some form or another in the public discourse, but all 128 00:06:50,767 --> 00:06:52,567 of them have this feature. 129 00:06:52,567 --> 00:06:55,767 A plan put forward by Marty Feldstein and Maya MacGuineas 130 00:06:55,767 --> 00:06:58,767 that some have cited, to cap the value at 2 percent, 131 00:06:58,767 --> 00:07:02,800 that also would raise about $500 billion to $600 billion. 132 00:07:02,800 --> 00:07:07,934 If you just applied it to households above $250,000 133 00:07:07,934 --> 00:07:11,200 and if you protected charity that idea would also raise in 134 00:07:11,200 --> 00:07:15,734 the neighborhood of $400 billion to $500 billion. 135 00:07:15,734 --> 00:07:17,933 Other proposals would retroactively eliminate 136 00:07:17,934 --> 00:07:20,834 municipal bonds, all of those types of things. 137 00:07:20,834 --> 00:07:23,367 So at the end of the day, that's why where the President 138 00:07:23,367 --> 00:07:28,100 is coming from is a combination of those rates -- having the tax 139 00:07:28,100 --> 00:07:31,033 cuts expire, doing tax expenditures -- tax expenditures 140 00:07:31,033 --> 00:07:35,333 can play a role, but they can't make up for the revenue that you 141 00:07:35,333 --> 00:07:38,300 would have gotten through rates. 142 00:07:38,300 --> 00:07:40,567 Mr. Carney: Now we'll take some questions for Jason. 143 00:07:40,567 --> 00:07:41,633 Go ahead. 144 00:07:41,633 --> 00:07:44,133 The Press: Jason, the Republicans are pointing to comments that 145 00:07:44,133 --> 00:07:48,433 the President made in 2011 in which he said we could raise 146 00:07:48,433 --> 00:07:52,967 $1.2 trillion in revenues without touching tax rates. 147 00:07:52,967 --> 00:07:57,734 I guess if it was an acceptable approach back then, why not now? 148 00:07:57,734 --> 00:07:59,734 Mr. Furman: First of all, there's a different context for those 149 00:07:59,734 --> 00:08:02,032 discussions then and the discussions now, and that's 150 00:08:02,033 --> 00:08:06,200 something Jay can elaborate on with you in a second. 151 00:08:06,200 --> 00:08:09,233 Second of all, let's look at how that agreement was structured. 152 00:08:09,233 --> 00:08:11,000 The agreement then was Republicans had 153 00:08:11,000 --> 00:08:12,467 offered decoupling. 154 00:08:12,467 --> 00:08:17,967 They had offered that on January 1st, 2013, the middle-class tax 155 00:08:17,967 --> 00:08:22,734 cuts would be made permanent and high-income taxes would go back 156 00:08:22,734 --> 00:08:26,866 to the Clinton-era rates if tax reform didn't succeed. 157 00:08:26,867 --> 00:08:29,734 So if we weren't able to accomplish through tax reform -- 158 00:08:29,734 --> 00:08:32,433 if you put forward -- and that could be you put forward a plan 159 00:08:32,433 --> 00:08:35,033 that got rid of the charitable deduction, that raised taxes on 160 00:08:35,033 --> 00:08:37,734 the middle-class families, that plan got voted down. 161 00:08:37,734 --> 00:08:40,400 Under that agreement then you would have had the type 162 00:08:40,400 --> 00:08:42,533 of decoupling that the President is calling for. 163 00:08:42,533 --> 00:08:45,166 It would have happened on the time scale as what the President 164 00:08:45,166 --> 00:08:46,567 is calling for. 165 00:08:46,567 --> 00:08:49,600 The last point I'd make is that our argument centers around the 166 00:08:49,600 --> 00:08:53,800 plausibility and desirability of the tax reform. 167 00:08:53,800 --> 00:08:57,934 Is it politically plausible to raise taxes on the middle class 168 00:08:57,934 --> 00:08:59,867 to get rid of the charitable deduction? 169 00:08:59,867 --> 00:09:02,766 Is it economically desirable to do those things? 170 00:09:02,767 --> 00:09:05,700 It's not saying it's -- the President, Jay, no one on the 171 00:09:05,700 --> 00:09:08,533 economic team has ever argued that it's mathematically 172 00:09:08,533 --> 00:09:11,700 impossible to make up for that revenue. 173 00:09:11,700 --> 00:09:13,700 It's just at the end of the day, you might have a question in a 174 00:09:13,700 --> 00:09:16,100 tax plan: Would you rather have a higher tax rate, 175 00:09:16,100 --> 00:09:18,934 or would you rather have a charitable deduction? 176 00:09:18,934 --> 00:09:22,266 I think most people, Democrats and Republicans, would rather 177 00:09:22,266 --> 00:09:25,033 have a slightly higher tax rate than eliminate 178 00:09:25,033 --> 00:09:26,767 the charitable deduction. 179 00:09:26,767 --> 00:09:29,367 But you might want to talk about the context. 180 00:09:29,367 --> 00:09:30,500 Mr. Carney: Well, we'll take some more questions. 181 00:09:30,500 --> 00:09:31,233 Go ahead, Jake. 182 00:09:31,233 --> 00:09:33,199 The Press: I'm following up on that, so if you want to weigh in on the 183 00:09:33,200 --> 00:09:35,100 political context. 184 00:09:35,100 --> 00:09:37,700 Mr. Carney: Well, I would simply, first of all, echo what Jason said, 185 00:09:37,700 --> 00:09:42,934 and that is that a key element that's not being discussed by 186 00:09:42,934 --> 00:09:46,666 people who are putting forward that comment by the President is 187 00:09:46,667 --> 00:09:51,400 that the backstop of the deal -- if there had been a deal, if the 188 00:09:51,400 --> 00:09:54,800 Republicans hadn't refused it and walked away from it -- was 189 00:09:54,800 --> 00:09:58,599 that the rates would go up on higher-income Americans when 190 00:09:58,600 --> 00:10:02,333 the Bush-era tax cuts expired, concurrent with a permanent 191 00:10:02,333 --> 00:10:05,333 extension of tax cuts for the middle class. 192 00:10:05,333 --> 00:10:07,867 The only way that wouldn't have happened is if tax reform were 193 00:10:07,867 --> 00:10:11,733 achieved in a way that was politically feasible -- in other 194 00:10:11,734 --> 00:10:13,600 words, that could pass Congress. 195 00:10:13,600 --> 00:10:16,967 So there's not a great distinction here between 196 00:10:16,967 --> 00:10:17,967 what we're saying now. 197 00:10:17,967 --> 00:10:22,934 The difference is back then, January 1st, 2013 created some 198 00:10:22,934 --> 00:10:27,100 time to attempt to do tax reform. 199 00:10:27,100 --> 00:10:30,567 January 1st, 2013 is now less than a month away. 200 00:10:30,567 --> 00:10:36,900 And tax rates have to go up as part of any responsible, 201 00:10:36,900 --> 00:10:40,165 balanced plan that achieves the revenue targets that are 202 00:10:40,166 --> 00:10:43,000 necessary for a $4 trillion deficit reduction plan, 203 00:10:43,000 --> 00:10:44,700 which is what the President seeks. 204 00:10:44,700 --> 00:10:49,066 He has said -- he said yesterday in an interview that stage two 205 00:10:49,066 --> 00:10:54,033 of this process can and should involve tax reform. 206 00:10:54,033 --> 00:10:59,834 And what shape that takes will be decided by Congress and the 207 00:10:59,834 --> 00:11:04,266 White House as they work through the issues and evaluate some of 208 00:11:04,266 --> 00:11:06,567 these concerns that Jason is talking about. 209 00:11:06,567 --> 00:11:10,900 How much can we garner from capping deductions, 210 00:11:10,900 --> 00:11:12,400 closing loopholes? 211 00:11:12,400 --> 00:11:17,199 And there are limits on that amount, as Jason just explained, 212 00:11:17,200 --> 00:11:23,000 because not just -- not because it's not hypothetically possible 213 00:11:23,000 --> 00:11:26,000 in a think tank to achieve it, but because it's not desirable 214 00:11:26,000 --> 00:11:28,800 economic policy and it's not politically feasible. 215 00:11:28,800 --> 00:11:35,467 Again, it's hard to imagine that Democrats or Republicans would 216 00:11:35,467 --> 00:11:37,367 vote to eliminate the charitable tax deduction. 217 00:11:37,367 --> 00:11:41,165 It's hard to imagine that anyone on Capitol Hill would vote for 218 00:11:41,166 --> 00:11:46,633 such substantial reductions or even an elimination of the 219 00:11:46,633 --> 00:11:52,400 mortgage interest deduction that it would severely raise taxes on 220 00:11:52,400 --> 00:11:53,500 the middle class. 221 00:11:53,500 --> 00:11:55,934 That's unacceptable to the President, but I imagine 222 00:11:55,934 --> 00:11:59,000 it's also unacceptable to many Republicans. 223 00:11:59,000 --> 00:12:01,667 The Press: I'm afraid I just don't see the difference other than the 224 00:12:01,667 --> 00:12:04,500 President feels like he's in a different position in terms of 225 00:12:04,500 --> 00:12:07,400 negotiations, maybe that he feels that he has a stronger 226 00:12:07,400 --> 00:12:09,367 hand now because of the reelection and because the 227 00:12:09,367 --> 00:12:12,900 tax rates automatically go up. 228 00:12:12,900 --> 00:12:16,066 But, I mean, what he said was -- I mean, the quote is -- "What we 229 00:12:16,066 --> 00:12:19,967 said was give us $1.2 trillion in additional revenues, which 230 00:12:19,967 --> 00:12:22,699 could be accomplished without hiking tax rates, that could 231 00:12:22,700 --> 00:12:24,700 simply be accomplished by eliminating loopholes, 232 00:12:24,700 --> 00:12:28,934 eliminating some deductions, and engaging in a tax reform process 233 00:12:28,934 --> 00:12:30,400 that could have lowered rates." 234 00:12:30,400 --> 00:12:33,367 It seems to me like here's your solution right now: Just agree 235 00:12:33,367 --> 00:12:36,033 to this and we can all go home and have a Christmas vacation. 236 00:12:36,033 --> 00:12:37,567 Mr. Carney: I'm going to ask Jason to do some substance. 237 00:12:37,567 --> 00:12:39,266 I would remind you that the Republicans did not 238 00:12:39,266 --> 00:12:40,266 agree to that. 239 00:12:40,266 --> 00:12:42,199 They didn't even come close for the third time -- 240 00:12:42,200 --> 00:12:43,333 The Press: It sounds like you don't agree to it now either. 241 00:12:43,333 --> 00:12:46,233 Mr. Carney: No, but the thing is he said we could have a process to look at 242 00:12:46,233 --> 00:12:50,599 tax reform, to see if we can close loopholes and 243 00:12:50,600 --> 00:12:51,967 cap deductions. 244 00:12:51,967 --> 00:12:56,233 But the fundamental aspect of that potential agreement, which 245 00:12:56,233 --> 00:12:59,532 Republicans walked away from, was that rates would go up on 246 00:12:59,533 --> 00:13:04,200 high-income earners next month if tax reform was not achieved. 247 00:13:04,200 --> 00:13:06,700 And that required tax reform passing Congress. 248 00:13:06,700 --> 00:13:08,166 I'll turn it over to Jason. 249 00:13:08,166 --> 00:13:09,900 Mr. Furman: Yes, I mean, two things -- one is I could just repeat the same 250 00:13:09,900 --> 00:13:13,033 example or switch over to a second or third or fourth 251 00:13:13,033 --> 00:13:15,567 example and walk through all of them, and explain 252 00:13:15,567 --> 00:13:16,700 why it is we have. 253 00:13:16,700 --> 00:13:19,967 And we've done a lot of work on this topic since last summer -- 254 00:13:19,967 --> 00:13:21,567 The Press: But the President changed his position. 255 00:13:21,567 --> 00:13:27,867 Mr. Furman: No. And the second thing is what we're seeking to do is to lock 256 00:13:27,867 --> 00:13:32,132 in revenue this year, not have some vague process that may or 257 00:13:32,133 --> 00:13:35,266 may not add up to something in the future. 258 00:13:35,266 --> 00:13:37,567 And so we're trying to pass something this month. 259 00:13:37,567 --> 00:13:40,266 We're trying to pass something this month rather than launch 260 00:13:40,266 --> 00:13:42,867 some long process, some long discussion. 261 00:13:42,867 --> 00:13:45,433 We really need to see what those proposals are. 262 00:13:45,433 --> 00:13:49,165 The proposals we've seen all have these types of flaws that 263 00:13:49,166 --> 00:13:50,567 I've identified. 264 00:13:50,567 --> 00:13:52,834 I don't think there's another proposal out there, because me 265 00:13:52,834 --> 00:13:55,199 and other members of the economic team spent enormous 266 00:13:55,200 --> 00:13:56,633 amounts of time on all of this. 267 00:13:56,633 --> 00:13:59,266 But if there are, they should bring them forward. 268 00:13:59,266 --> 00:14:00,333 We should see them. 269 00:14:00,333 --> 00:14:01,467 That's what's been so frustrating. 270 00:14:01,467 --> 00:14:04,867 They keep saying, let's not do rates, let's do this. 271 00:14:04,867 --> 00:14:05,867 Well, what is this? 272 00:14:05,867 --> 00:14:07,599 What is it? Point to it. 273 00:14:07,600 --> 00:14:08,800 Tell us what it is. 274 00:14:08,800 --> 00:14:10,065 Show us a score. 275 00:14:10,066 --> 00:14:11,767 Tell us how it locks in revenue -- because you're trying to 276 00:14:11,767 --> 00:14:15,300 actually pass a bill this year, not engage in some long process 277 00:14:15,300 --> 00:14:18,199 around tax reform, which we don't have time to do by the 278 00:14:18,200 --> 00:14:20,000 end of this year. 279 00:14:20,000 --> 00:14:23,633 The Press: Jason, can I ask, you get to $1.6 trillion not just 280 00:14:23,633 --> 00:14:25,433 by raising tax rates. 281 00:14:25,433 --> 00:14:27,834 How could you achieve those additional revenues without 282 00:14:27,834 --> 00:14:31,467 doing damage to the U.S. housing market or to hurting 283 00:14:31,467 --> 00:14:34,667 the charities and non-profits that the President talked about 284 00:14:34,667 --> 00:14:36,367 last night? 285 00:14:36,367 --> 00:14:39,300 Mr. Furman: In the President's proposal you have the decoupling that 286 00:14:39,300 --> 00:14:41,300 gets you $950 (billion), and then he has an 287 00:14:41,300 --> 00:14:43,000 additional proposal where he takes the 288 00:14:43,000 --> 00:14:47,266 value of tax deductions and other tax expenditures, and 289 00:14:47,266 --> 00:14:49,800 limits their value to 28 percent, which is what 290 00:14:49,800 --> 00:14:52,032 you'd get if you were upper middle class -- in effect, 291 00:14:52,033 --> 00:14:55,266 you'd get 28 percent value for all of those. 292 00:14:55,266 --> 00:14:58,433 And so he trims them across the board and he saves several 293 00:14:58,433 --> 00:15:00,867 hundred billion dollars with that proposal. 294 00:15:00,867 --> 00:15:04,367 The exact amount depends on where the tax rate is and who's 295 00:15:04,367 --> 00:15:05,900 doing the scoring. 296 00:15:05,900 --> 00:15:08,934 He thinks that type of thing -- targeted high-income households 297 00:15:08,934 --> 00:15:11,867 done in a way that trims things across the board, but doesn't 298 00:15:11,867 --> 00:15:16,934 bluntly eliminate anything, would be sound economic policy 299 00:15:16,934 --> 00:15:18,567 and it's something he's defended over the last several years. 300 00:15:18,567 --> 00:15:21,033 The Press: But Boehner's people keep saying that they're not eliminating the 301 00:15:21,033 --> 00:15:23,200 charitable deduction, and keep saying that, but that they want 302 00:15:23,200 --> 00:15:24,166 to limit it. 303 00:15:24,166 --> 00:15:24,967 Isn't that a different -- 304 00:15:24,967 --> 00:15:25,533 Mr. Furman: Okay, but I -- 305 00:15:25,533 --> 00:15:26,900 The Press: There's a difference between -- but you keep 306 00:15:26,900 --> 00:15:27,766 using the word "eliminate" -- 307 00:15:27,767 --> 00:15:29,800 Mr. Furman: No, no, but I guess -- I mean, but this is another -- 308 00:15:29,800 --> 00:15:30,632 The Press: I haven't seen it on paper. 309 00:15:30,633 --> 00:15:31,233 You can tell me -- 310 00:15:31,233 --> 00:15:34,532 Mr. Furman: I have heard them refer to a report by the Committee for 311 00:15:34,533 --> 00:15:38,734 Responsible Federal Budget and say -- we sometimes ask, how do 312 00:15:38,734 --> 00:15:39,367 you get it? 313 00:15:39,367 --> 00:15:42,533 Well, often we'll ask you guys, you'll ask them, they'll point 314 00:15:42,533 --> 00:15:43,767 you to this report. 315 00:15:43,767 --> 00:15:47,233 This report, I have it here, it has three plans in it. 316 00:15:47,233 --> 00:15:50,500 Two of those three plans eliminate the charitable 317 00:15:50,500 --> 00:15:52,767 deduction for the majority of high-income households 318 00:15:52,767 --> 00:15:53,800 in this country. 319 00:15:53,800 --> 00:15:58,300 So you can't tell people you have a plan, point to a document 320 00:15:58,300 --> 00:16:01,632 that you say contains three different plans that could be 321 00:16:01,633 --> 00:16:04,734 like your plan, and then two out of three of those plans 322 00:16:04,734 --> 00:16:07,367 eliminate the tax deduction for the vast majority of 323 00:16:07,367 --> 00:16:08,367 high-income households. 324 00:16:08,367 --> 00:16:09,367 The Press: Sure. I'll let them defend that. 325 00:16:09,367 --> 00:16:14,300 But the point is in 2009 and 2011, the President himself 326 00:16:14,300 --> 00:16:17,233 proposed limiting the charitable deduction, all kinds of 327 00:16:17,233 --> 00:16:19,032 deductions -- as you know, you probably wrote the plans -- 328 00:16:19,033 --> 00:16:20,700 for the rich. 329 00:16:20,700 --> 00:16:23,433 And in 2009, he was asked at a news conference, isn't this 330 00:16:23,433 --> 00:16:25,533 going to decimate charitable giving, and he said, no, we've 331 00:16:25,533 --> 00:16:27,033 looked at it and it won't. 332 00:16:27,033 --> 00:16:28,033 So what's changed? 333 00:16:28,033 --> 00:16:30,533 He put that on the table in 2009 to pay for health care and said 334 00:16:30,533 --> 00:16:32,066 it's not going to hurt charities. 335 00:16:32,066 --> 00:16:33,900 Now Boehner puts it on the table and he says, oh, it's going to 336 00:16:33,900 --> 00:16:34,699 kill charities. 337 00:16:34,700 --> 00:16:37,600 Mr. Furman: What's changed is a few letters that are quite important -- the 338 00:16:37,600 --> 00:16:41,033 difference between limit and eliminate. 339 00:16:41,033 --> 00:16:41,633 His -- 340 00:16:41,633 --> 00:16:42,633 The Press: Which do you say they're going to limit again? 341 00:16:42,633 --> 00:16:46,066 Mr. Furman: His plan limits the charitable deduction. 342 00:16:46,066 --> 00:16:47,867 It does it in a gradual way. 343 00:16:47,867 --> 00:16:50,467 It does it in a way that we think is completely consistent 344 00:16:50,467 --> 00:16:52,133 with charitable giving. 345 00:16:52,133 --> 00:16:54,767 And, by the way, under his plan you've got a 28 percent tax 346 00:16:54,767 --> 00:16:56,500 incentive for charitable giving. 347 00:16:56,500 --> 00:16:58,433 That's what you got under President Reagan when the 348 00:16:58,433 --> 00:17:00,633 top tax rate was 28 percent. 349 00:17:00,633 --> 00:17:04,266 Any Republican that supports a tax plan with 28 percent tax 350 00:17:04,266 --> 00:17:07,066 rate, even if they don't limit tax deductions, that's the value 351 00:17:07,066 --> 00:17:08,066 of tax deduction. 352 00:17:08,066 --> 00:17:11,200 So it's a pretty standard value for tax deductions that we've 353 00:17:11,200 --> 00:17:15,066 had in the past in this country that people have proposed. 354 00:17:15,066 --> 00:17:19,667 If you want to get to a trillion dollars on tax expenditures, let 355 00:17:19,666 --> 00:17:23,466 alone to the $1.6 trillion, most of the plans we've seen 356 00:17:23,467 --> 00:17:25,200 eliminated entirely. 357 00:17:25,200 --> 00:17:27,400 You don't get 28 percent, you don't get 15 percent, 358 00:17:27,400 --> 00:17:29,333 you don't get the 12 percent you got in Bowles-Simpson. 359 00:17:29,333 --> 00:17:30,867 You get zero percent. 360 00:17:30,867 --> 00:17:34,200 That would have a major impact on charities -- we estimated 361 00:17:34,200 --> 00:17:37,633 $10 billion a year using the CBO methodology. 362 00:17:37,633 --> 00:17:39,533 The Press: Can you clarify some of the terms you're using? 363 00:17:39,533 --> 00:17:42,399 Because you both referred to what sounds like a two-step 364 00:17:42,400 --> 00:17:45,266 plan, but would you lay it out for us -- why are you talking 365 00:17:45,266 --> 00:17:48,400 about this in two steps, Jason? 366 00:17:48,400 --> 00:17:51,734 Mr. Furman: Yes -- because there is less than a month to go before the 367 00:17:51,734 --> 00:17:52,734 end of this year. 368 00:17:52,734 --> 00:17:55,667 And what the President is not going to do is put in place some 369 00:17:55,667 --> 00:17:58,233 type of process that may or may not come up with the revenue. 370 00:17:58,233 --> 00:18:00,700 We need to lock in a set of revenue right now. 371 00:18:00,700 --> 00:18:02,767 He's proposed a very simple way to do it that, by the way, 372 00:18:02,767 --> 00:18:05,633 doesn't need to require anyone to vote for a tax increase. 373 00:18:05,633 --> 00:18:08,233 It just requires them to vote to extend the middle-class tax cuts 374 00:18:08,233 --> 00:18:09,567 -- that gets you a trillion. 375 00:18:09,567 --> 00:18:10,467 And then you have more time next year to -- 376 00:18:10,467 --> 00:18:11,567 The Press: Right, but the first step is Clinton rates. 377 00:18:11,567 --> 00:18:12,266 Mr. Furman: Yes, absolutely. 378 00:18:12,266 --> 00:18:13,266 The Press: You go up with the Clinton rates. 379 00:18:13,266 --> 00:18:14,800 And then the second step he said you could -- 380 00:18:14,800 --> 00:18:15,466 Mr. Furman: The second step would be -- 381 00:18:15,467 --> 00:18:16,934 The Press: -- lower tax rates for everyone. 382 00:18:16,934 --> 00:18:18,200 Mr. Furman: Right. The second step would be tax reform. 383 00:18:18,200 --> 00:18:21,567 And as the President said in an interview the other day, 384 00:18:21,567 --> 00:18:23,633 consistent with what he said over the last several years, 385 00:18:23,633 --> 00:18:25,900 absolutely try to look (at) could you simplify the tax code, 386 00:18:25,900 --> 00:18:28,066 could you make it more fair, could you make it more efficient, 387 00:18:28,066 --> 00:18:30,100 could you lower rates -- which is starting from that 388 00:18:30,100 --> 00:18:31,699 39.6 percent rate. 389 00:18:31,700 --> 00:18:34,233 You're also starting from a lot of tax expenditures still being 390 00:18:34,233 --> 00:18:37,300 out there so you have more scope to do things in tax reform than 391 00:18:37,300 --> 00:18:38,966 if you got rid of them all in stage one. 392 00:18:38,967 --> 00:18:40,600 The Press: And that would be done next year? 393 00:18:40,600 --> 00:18:43,699 Mr. Furman: We had floated the idea of an August 1st deadline for that 394 00:18:43,700 --> 00:18:45,834 process because we think that's the amount of time you'd need. 395 00:18:45,834 --> 00:18:48,600 The Press: So when you're talking about the Republicans talking about these 396 00:18:48,600 --> 00:18:51,632 vague ideas and you want some specifics, are you suggesting 397 00:18:51,633 --> 00:18:55,233 that they're trying to put out there things that would score as 398 00:18:55,233 --> 00:18:57,899 revenue now and then get repealed down the line? 399 00:18:57,900 --> 00:19:02,500 Mr. Furman: My understanding is that they are saying here is something 400 00:19:02,500 --> 00:19:05,467 you could pass this year, that instead of the top rate going 401 00:19:05,467 --> 00:19:09,500 to 39.6, we could keep the top rate at 35, it's not a long, 402 00:19:09,500 --> 00:19:12,567 complicated tax reform process, but it would lock in the revenue 403 00:19:12,567 --> 00:19:13,700 that you, Mr. President, wants. 404 00:19:13,700 --> 00:19:16,533 So you want guaranteed revenue, we can do that. 405 00:19:16,533 --> 00:19:20,166 You want it at a 35 percent rate, we can do that; here, 406 00:19:20,166 --> 00:19:22,633 go look, there is some think tank somewhere that has an 407 00:19:22,633 --> 00:19:23,633 idea for that. 408 00:19:23,633 --> 00:19:25,800 We go and look at the think tank and find that two of the three 409 00:19:25,800 --> 00:19:28,300 ideas eliminate the charitable deduction. 410 00:19:28,300 --> 00:19:32,567 And a lot of this is just -- I'm not characterizing anything in a 411 00:19:32,567 --> 00:19:33,900 back-and-forth in negotiations. 412 00:19:33,900 --> 00:19:35,967 I'm just saying the types of things, different types 413 00:19:35,967 --> 00:19:36,533 of people -- 414 00:19:36,533 --> 00:19:37,433 The Press: Are you negotiating with them? 415 00:19:37,433 --> 00:19:40,266 Mr. Furman: -- these are conversations that are always going on. 416 00:19:40,266 --> 00:19:42,133 The Press: Yesterday they were? 417 00:19:42,133 --> 00:19:44,800 Mr. Furman: Any time someone from there calls, someone from here is 418 00:19:44,800 --> 00:19:47,200 going to take that call and have a conversation with them. 419 00:19:47,200 --> 00:19:49,233 The Press: They say they didn't have any calls yesterday. 420 00:19:49,233 --> 00:19:51,433 Mr. Furman: Oh, I'm not saying whether there was a call yesterday. 421 00:19:51,433 --> 00:19:53,066 Mr. Carney: I can address this. 422 00:19:53,066 --> 00:19:56,900 As we've said repeatedly, the President is engaged, his team 423 00:19:56,900 --> 00:20:00,600 is engaged in broad discussions about how to move this process 424 00:20:00,600 --> 00:20:03,265 forward, how to address the fiscal cliff, how to address 425 00:20:03,266 --> 00:20:05,266 long-term deficit reduction. 426 00:20:07,934 --> 00:20:09,567 We're not going to read out every conversation. 427 00:20:09,567 --> 00:20:11,734 We're not going to read out every proposal. 428 00:20:11,734 --> 00:20:17,233 The fact of the matter is the President has an absolute 429 00:20:17,233 --> 00:20:22,767 principle here that he's not going to abandon, which is 430 00:20:22,767 --> 00:20:25,133 that rates are going up on top earners. 431 00:20:25,133 --> 00:20:25,700 And this is not -- 432 00:20:25,700 --> 00:20:27,400 The Press: But you don't dispute there were no conversations yesterday and 433 00:20:27,400 --> 00:20:28,667 there was no exchange of information. 434 00:20:28,667 --> 00:20:31,166 Mr. Carney: I have no conversations to report, and I can tell you 435 00:20:31,166 --> 00:20:34,300 that I'm not going to report out to you blow by blow -- 436 00:20:34,300 --> 00:20:36,433 The Press: Some of you guys are saying you want more detail and then not 437 00:20:36,433 --> 00:20:37,867 engaging in the conversation. 438 00:20:37,867 --> 00:20:39,200 So it's a little -- 439 00:20:39,200 --> 00:20:42,934 Mr. Carney: Again, I had somebody say the day after -- and I had just said 440 00:20:42,934 --> 00:20:45,399 so publicly the President had spoken on the phone with Speaker 441 00:20:45,400 --> 00:20:48,767 Boehner -- or maybe 36 hours, why isn't the President speaking 442 00:20:48,767 --> 00:20:49,700 to Speaker Boehner? 443 00:20:49,700 --> 00:20:51,633 Well, he has several times. 444 00:20:51,633 --> 00:20:53,633 He spoke with the numerous lawmakers who were here in 445 00:20:53,633 --> 00:20:54,667 the White House several times. 446 00:20:54,667 --> 00:20:58,233 His team is very engaged in this process. 447 00:20:58,233 --> 00:21:01,700 But here's what we're not going to do: We're not going 448 00:21:01,700 --> 00:21:05,033 to negotiate against ourselves. 449 00:21:05,033 --> 00:21:08,233 We're not going to take the flat refusal of Republicans 450 00:21:08,233 --> 00:21:11,834 to acknowledge what will happen, which is that rates are going up 451 00:21:11,834 --> 00:21:18,567 on top earners, as an incentive to negotiate with ourselves. 452 00:21:18,567 --> 00:21:20,767 The President has put forward, unlike the Republicans -- 453 00:21:20,767 --> 00:21:22,867 contrary to what Ed has said -- the Republicans have not put 454 00:21:22,867 --> 00:21:28,200 forward a single sentence that in any way provides 455 00:21:28,200 --> 00:21:31,667 some specifics on their proposal on revenue -- not a single 456 00:21:31,667 --> 00:21:33,632 specific at all. 457 00:21:33,633 --> 00:21:36,800 The President has -- and he's done it on the spending side, 458 00:21:36,800 --> 00:21:39,367 too -- he's provided a substantial specificity when 459 00:21:39,367 --> 00:21:43,066 it comes to entitlement savings, both through our health care 460 00:21:43,066 --> 00:21:46,233 entitlement programs and other mandatory entitlement programs. 461 00:21:46,233 --> 00:21:49,200 And the goal here -- don't forget the goal here: 462 00:21:49,200 --> 00:21:50,266 We focus on revenues. 463 00:21:50,266 --> 00:21:52,533 The President is engaged in this process because he believes 464 00:21:52,533 --> 00:21:56,265 broad-based deficit reduction to the tune of $4 trillion over 465 00:21:56,266 --> 00:22:00,867 10 years is a desirable thing to achieve for the economy, 466 00:22:00,867 --> 00:22:02,265 for the American people. 467 00:22:02,266 --> 00:22:05,033 And he believes that in order to achieve that we need to do 468 00:22:05,033 --> 00:22:08,600 that in a balanced way that includes revenue on the order 469 00:22:08,600 --> 00:22:11,332 that he's described. 470 00:22:11,333 --> 00:22:13,867 The Press: Are you saying that before he will actually get in a room and 471 00:22:13,867 --> 00:22:17,133 sit down with Boehner and Cantor -- which they asked him to do 472 00:22:17,133 --> 00:22:21,533 today -- that they have to cry uncle on rates? 473 00:22:21,533 --> 00:22:26,734 Mr. Carney: Again, I'm not going to -- as much as I understand there's 474 00:22:26,734 --> 00:22:31,433 interest in it -- read out to you our meeting schedules or 475 00:22:31,433 --> 00:22:35,333 every communication we have with congressional leaders. 476 00:22:35,333 --> 00:22:40,800 It is not a point of debate with the President that rates are 477 00:22:40,800 --> 00:22:42,500 going up on top earners. 478 00:22:42,500 --> 00:22:50,200 And I think -- I understand that a lot of Republicans didn't want 479 00:22:50,200 --> 00:22:52,900 him to win reelection and thought he was not going to, 480 00:22:52,900 --> 00:22:55,633 and so maybe they weren't paying close attention, but he was 481 00:22:55,633 --> 00:22:58,567 extremely explicit about this every day, as those of you who 482 00:22:58,567 --> 00:23:00,767 traveled with us know. 483 00:23:00,767 --> 00:23:02,467 He did not hide the ball. 484 00:23:02,467 --> 00:23:04,834 And some people probably thought he was taking some political 485 00:23:04,834 --> 00:23:07,834 risk in being very clear with the American people that he 486 00:23:07,834 --> 00:23:11,300 believed, as a matter of sound economic policy and fairness, 487 00:23:11,300 --> 00:23:15,000 that tax cuts for middle-class Americans, for 98 percent of the 488 00:23:15,000 --> 00:23:19,567 American people ought to be extended and that tax rates for 489 00:23:19,567 --> 00:23:22,867 the top 2 percent had to go up. 490 00:23:22,867 --> 00:23:27,600 And I think the American people spoke very clearly on this issue 491 00:23:27,600 --> 00:23:29,132 on November 6th. 492 00:23:29,133 --> 00:23:31,834 They very clearly, in the aftermath of November 6th, 493 00:23:31,834 --> 00:23:35,133 have expressed to your news organization and to others who 494 00:23:35,133 --> 00:23:38,467 have done surveys how they feel about the various proposals that 495 00:23:38,467 --> 00:23:39,467 are out there. 496 00:23:39,467 --> 00:23:42,433 They support the principle that the wealthiest need to pay a 497 00:23:42,433 --> 00:23:45,500 little bit more so that the burden of deficit reduction 498 00:23:45,500 --> 00:23:48,600 is not borne solely by the middle class or by seniors. 499 00:23:48,600 --> 00:23:50,433 And the President is going to stick to that principle. 500 00:23:50,433 --> 00:23:52,934 When the Republicans are ready to acknowledge that rates are 501 00:23:52,934 --> 00:23:55,867 going up, we believe that -- well, again, you're focused 502 00:23:55,867 --> 00:23:57,200 on process. 503 00:23:57,200 --> 00:24:00,200 We believe that we're going to continue to have conversations 504 00:24:00,200 --> 00:24:02,266 regardless and including conversations that the President 505 00:24:02,266 --> 00:24:05,633 just did with business leaders at the Business Roundtable, 506 00:24:05,633 --> 00:24:11,700 who have very much at stake here in this process. 507 00:24:11,700 --> 00:24:14,834 And he'll continue to speak with leaders in Washington 508 00:24:14,834 --> 00:24:15,934 about this. 509 00:24:15,934 --> 00:24:20,567 But once Republicans acknowledge that rates are going up for top 510 00:24:20,567 --> 00:24:25,800 earners, we believe that an agreement is very achievable. 511 00:24:25,800 --> 00:24:26,800 Why? 512 00:24:26,800 --> 00:24:29,066 Because unlike Republicans, the President has been very specific 513 00:24:29,066 --> 00:24:32,767 on both sides of the equation, both on revenues and on 514 00:24:32,767 --> 00:24:33,767 spending cuts. 515 00:24:33,767 --> 00:24:36,233 And he's made clear that he wants to negotiate with 516 00:24:36,233 --> 00:24:39,233 Republicans, that he's not expecting to get every item in 517 00:24:39,233 --> 00:24:42,567 his plan just the way he wants it, and that he's going to be 518 00:24:42,567 --> 00:24:43,767 willing to make tough choices. 519 00:24:43,767 --> 00:24:48,767 But on the matter of the top 2 percent paying higher rates, 520 00:24:48,767 --> 00:24:49,834 that's going to happen. 521 00:24:49,834 --> 00:24:54,000 The Press: Just to clarify something -- no, not on that, 522 00:24:54,000 --> 00:24:54,834 but another subject -- 523 00:24:54,834 --> 00:24:56,800 Mr. Carney: I don't have any -- I know Bill is particularly interested in 524 00:24:56,800 --> 00:24:59,633 this and whether or not -- and when the next meeting is. 525 00:24:59,633 --> 00:25:01,166 I don't have a schedule to read out to you. 526 00:25:01,166 --> 00:25:03,734 The Press: No, no, no. In answer to Laura's question, was that a yes? 527 00:25:03,734 --> 00:25:07,132 Mr. Carney: No, my answer to that question was conversations will continue, 528 00:25:07,133 --> 00:25:08,400 I have no doubt. 529 00:25:08,400 --> 00:25:09,333 But -- 530 00:25:09,333 --> 00:25:10,934 The Press: Even before they give up on rates? 531 00:25:10,934 --> 00:25:13,200 Mr. Carney: Well, an agreement won't be reached until they understand 532 00:25:13,200 --> 00:25:14,500 that rates have to go up. 533 00:25:14,500 --> 00:25:15,400 The Press: But I just want to clarify. 534 00:25:15,400 --> 00:25:17,166 Today you're saying -- you're no longer saying 535 00:25:17,166 --> 00:25:18,433 the math doesn't add up. 536 00:25:18,433 --> 00:25:21,333 You're saying it's politically unfeasible and bad policy. 537 00:25:21,333 --> 00:25:22,066 Those are two different things. 538 00:25:22,066 --> 00:25:26,734 Mr. Furman: No, no, no -- but math isn't remotely sound. 539 00:25:26,734 --> 00:25:28,867 And the President, in his first press conference after the 540 00:25:28,867 --> 00:25:33,466 election, I'm pretty sure said something very similar that I've 541 00:25:33,467 --> 00:25:36,700 certainly seen Jay say something very similar, and to the degree 542 00:25:36,700 --> 00:25:38,734 I've had conversations with a number of you. 543 00:25:38,734 --> 00:25:42,867 This is -- during the campaign, there was an argument about a 544 00:25:42,867 --> 00:25:46,367 tax plan with a 28 percent rate that would have required a tax 545 00:25:46,367 --> 00:25:49,667 increase of $2,000 on middle-class families. 546 00:25:49,667 --> 00:25:52,567 That argument was about pure mathematics. 547 00:25:52,567 --> 00:25:55,233 Even if you get rid of 100 percent of everything, it would 548 00:25:55,233 --> 00:25:57,500 still require this to work. 549 00:25:57,500 --> 00:26:01,667 Here our argument is if you want to protect the middle class, if 550 00:26:01,667 --> 00:26:04,000 you want to not eliminate the charitable deduction, if you 551 00:26:04,000 --> 00:26:07,500 want to not retroactively, entirely eliminate and destroy 552 00:26:07,500 --> 00:26:10,000 a several trillion-dollar municipal bond market, 553 00:26:10,000 --> 00:26:12,767 then you can't do this. 554 00:26:12,767 --> 00:26:13,400 The Press: Can I just -- 555 00:26:13,400 --> 00:26:15,734 Mr. Furman: And those all seem like perfectly reasonable premises to 556 00:26:15,734 --> 00:26:18,265 us, and if somebody thinks you should retroactively eliminate 557 00:26:18,266 --> 00:26:20,800 the muni market, they should come forward with a proposal. 558 00:26:20,800 --> 00:26:24,000 The Press: But when you say you're not going to talk about process, 559 00:26:24,000 --> 00:26:26,834 or process isn't important, with two weeks left -- or 560 00:26:26,834 --> 00:26:29,000 however many weeks -- process does become important. 561 00:26:29,000 --> 00:26:33,166 And for you to say to Ed, well, we -- you to ask us, we ask you, 562 00:26:33,166 --> 00:26:35,000 you go back and ask them, that seems ridiculous. 563 00:26:35,000 --> 00:26:38,500 Why not call them into a room and say, explain how this works, 564 00:26:38,500 --> 00:26:40,800 what are you willing to do, instead of doing this? 565 00:26:40,800 --> 00:26:45,000 Mr. Furman: We would love to see -- there is no secret from any conversation 566 00:26:45,000 --> 00:26:48,633 that's happened in any format that we would love to see 567 00:26:48,633 --> 00:26:52,333 details of a proposal to limit tax expenditures. 568 00:26:52,333 --> 00:26:56,266 The only proposal that's fully fleshed out, fully scored, 569 00:26:56,266 --> 00:26:59,133 fully worked out, is the President's proposal. 570 00:26:59,133 --> 00:27:01,100 It's a good proposal. 571 00:27:01,100 --> 00:27:04,000 It doesn't raise enough revenue for what we need 572 00:27:04,000 --> 00:27:05,033 to bring the debt down. 573 00:27:05,033 --> 00:27:06,100 The Press: Are you going to ask them for the details? 574 00:27:06,100 --> 00:27:08,199 Mr. Furman: Absolutely, we've consistently asked for details. 575 00:27:08,200 --> 00:27:12,767 And what we generally get referred to is a paper by the 576 00:27:12,767 --> 00:27:14,300 Committee for Responsible Federal Budget. 577 00:27:14,300 --> 00:27:15,700 They're an excellent think tank. 578 00:27:15,700 --> 00:27:18,767 Things that think tanks do have all sorts of interesting ideas. 579 00:27:18,767 --> 00:27:22,967 They tend -- all think tanks -- to not be the same degree 580 00:27:22,967 --> 00:27:26,133 of rigor and analysis, that something would go through if 581 00:27:26,133 --> 00:27:28,767 it went through the official resources that Congress has at 582 00:27:28,767 --> 00:27:31,500 its disposal through the Joint Committee on Taxation that we 583 00:27:31,500 --> 00:27:34,734 have at our disposal through the Treasury and the White House. 584 00:27:34,734 --> 00:27:37,300 When you put proposals through things like that, you discover 585 00:27:37,300 --> 00:27:39,800 things like having these types of cliffs doesn't work. 586 00:27:39,800 --> 00:27:41,934 You discover how many people lose their -- 587 00:27:41,934 --> 00:27:42,934 you discover all that. 588 00:27:42,934 --> 00:27:45,233 That's why it's so important to see something real. 589 00:27:45,233 --> 00:27:47,332 Again, I have no doubt you can have a sound proposal 590 00:27:47,333 --> 00:27:50,300 that raises hundreds of billions of dollars. 591 00:27:50,300 --> 00:27:54,100 To raise $1.6 trillion, to raise even the $1 trillion that we're 592 00:27:54,100 --> 00:27:59,233 calling for out of decoupling, we don't see something plausible 593 00:27:59,233 --> 00:28:02,233 or desirable without rates going up. 594 00:28:02,233 --> 00:28:05,265 The Press: What is the meaningful revenue target that you are aiming for? 595 00:28:05,266 --> 00:28:08,567 The President today said at the BRT, "But there is a bottom line 596 00:28:08,567 --> 00:28:10,967 amount of revenue that is required in order for us to 597 00:28:10,967 --> 00:28:14,233 get a real, meaningful deficit reduction plan that hits the 598 00:28:14,233 --> 00:28:16,399 numbers for us to stabilize our debt." 599 00:28:16,400 --> 00:28:17,934 He said that in two different forums. 600 00:28:17,934 --> 00:28:19,266 So what is the target? 601 00:28:19,266 --> 00:28:19,967 It sounds like you're saying -- 602 00:28:19,967 --> 00:28:24,000 Mr. Furman: I'm sure Jay negotiates the details with you all every day, 603 00:28:24,000 --> 00:28:26,433 but I don't think that's what he brought me here for. 604 00:28:26,433 --> 00:28:29,667 We have $1.6 trillion in our budget; $950 (billion) 605 00:28:29,667 --> 00:28:32,166 is what you'd lock in through decoupling right away. 606 00:28:32,166 --> 00:28:33,934 We're trying to get to $4 trillion in total. 607 00:28:33,934 --> 00:28:36,500 Those are all some of our touchstones. 608 00:28:36,500 --> 00:28:40,033 But obviously the President said he's open to other ideas. 609 00:28:40,033 --> 00:28:42,466 He's open to compromise. 610 00:28:42,467 --> 00:28:46,400 But even that $950 billion -- and that wouldn't be enough -- 611 00:28:46,400 --> 00:28:52,300 but even that $950 billion you can't get through a plausible, 612 00:28:52,300 --> 00:28:55,633 desirable tax reform that doesn't raise rates in a 613 00:28:55,633 --> 00:28:58,667 format that we've seen. 614 00:28:58,667 --> 00:29:02,332 Mr. Carney: Can I just say -- I just want to make the point here that -- 615 00:29:02,333 --> 00:29:03,033 two points. 616 00:29:03,033 --> 00:29:05,699 One, this is a discussion about a broad-based deficit reduction 617 00:29:05,700 --> 00:29:07,600 package that the President seeks. 618 00:29:07,600 --> 00:29:14,833 Republicans should -- I think it would be helpful -- engage 619 00:29:14,834 --> 00:29:18,867 in this process because the process envisions $4 trillion 620 00:29:18,867 --> 00:29:19,867 in deficit reduction. 621 00:29:19,867 --> 00:29:23,899 This is not just about the revenue figure. 622 00:29:23,900 --> 00:29:30,500 But the obstacle continues to be an adamant refusal by Republican 623 00:29:30,500 --> 00:29:33,800 leaders to this point to accept the premise that rates need to 624 00:29:33,800 --> 00:29:38,433 go up on the wealthiest 2 percent, and the willingness 625 00:29:38,433 --> 00:29:40,233 to do all sorts of other things. 626 00:29:40,233 --> 00:29:48,433 Last summer it was default on the full faith and credit of 627 00:29:48,433 --> 00:29:51,433 the United States; this year it's allow taxes to go up on 628 00:29:51,433 --> 00:29:54,834 middle-class families, all for the sake of protecting 629 00:29:54,834 --> 00:29:57,233 tax breaks for millionaires and billionaires -- tax breaks that 630 00:29:57,233 --> 00:30:00,265 the overwhelming majority of the American people do not believe 631 00:30:00,266 --> 00:30:03,433 we can afford, do not believe are good economic policy. 632 00:30:03,433 --> 00:30:09,500 And so, as Jason has been making clear, if the Republicans 633 00:30:09,500 --> 00:30:12,300 believe that they have an alternative proposal that 634 00:30:12,300 --> 00:30:14,332 achieves the kind of revenue that's necessary, they ought 635 00:30:14,333 --> 00:30:15,400 to put it on paper. 636 00:30:15,400 --> 00:30:20,000 And I think the reason they haven't is because they know, 637 00:30:20,000 --> 00:30:23,500 as Jason has just explained, that there isn't a plausible 638 00:30:23,500 --> 00:30:27,133 proposal that produces the amount of revenue necessary 639 00:30:27,133 --> 00:30:32,266 that could pass Congress or that makes economic sense. 640 00:30:32,266 --> 00:30:38,867 So rates are going to go up on the top 2 percent, and we look 641 00:30:38,867 --> 00:30:44,767 forward to Republican leaders agreeing with every day more and 642 00:30:44,767 --> 00:30:49,934 more of their colleagues, every day more and more business 643 00:30:49,934 --> 00:30:55,934 leaders who have made the statement publicly that we 644 00:30:55,934 --> 00:30:58,066 need to get this done, we need to acknowledge that rates are 645 00:30:58,066 --> 00:31:00,900 going up, and that a lot of the arguments Republicans have 646 00:31:00,900 --> 00:31:05,533 traditionally put forward about why we can't possibly ask the 647 00:31:05,533 --> 00:31:09,632 wealthiest 2 percent to pay top marginal rates at the level that 648 00:31:09,633 --> 00:31:12,300 they paid under Clinton are spurious. 649 00:31:12,300 --> 00:31:18,533 I think the CEO of FedEx said as much recently. 650 00:31:18,533 --> 00:31:20,966 Senator Coburn has said so, Senator Snowe, 651 00:31:20,967 --> 00:31:23,233 Representative Cole. 652 00:31:23,233 --> 00:31:27,233 The FedEx Chairman and CEO, Fred Smith, said I think just the 653 00:31:27,233 --> 00:31:30,033 other day that there's a lot of mythology in Washington, 654 00:31:30,033 --> 00:31:33,632 and among that mythology is that if you raise the rates 655 00:31:33,633 --> 00:31:36,100 on the top 2 percent you'll kill jobs. 656 00:31:36,100 --> 00:31:38,433 We know that's not true because those were the rates that were 657 00:31:38,433 --> 00:31:42,900 in place in the 1990s when this economy created more jobs than 658 00:31:42,900 --> 00:31:46,033 we've ever seen created in that period of time in our lifetimes. 659 00:31:46,033 --> 00:31:55,166 So we believe that, despite obvious resistance to what has 660 00:31:55,166 --> 00:31:59,332 to be the framework of a deal here, that progress is being 661 00:31:59,333 --> 00:32:05,533 made and that a compromise is possible, a way to reach 662 00:32:05,533 --> 00:32:07,265 an agreement is possible. 663 00:32:07,266 --> 00:32:11,233 But it requires some seriousness by Republican leaders on this 664 00:32:11,233 --> 00:32:15,399 very important issue. 665 00:32:15,400 --> 00:32:16,000 The Press: Jay, thanks. 666 00:32:16,000 --> 00:32:18,400 The President gave a warning today to Republicans that they 667 00:32:18,400 --> 00:32:21,033 shouldn't use the debt limit as a bargaining chip if the bulk of 668 00:32:21,033 --> 00:32:23,667 this work goes past the January 1st deadline. 669 00:32:23,667 --> 00:32:26,000 Realistically, is there anything that he could do or that he's 670 00:32:26,000 --> 00:32:29,500 prepared to do to stop it from happening? 671 00:32:29,500 --> 00:32:31,567 Mr. Carney: The President made clear today at the Business Roundtable that 672 00:32:31,567 --> 00:32:36,266 he will not engage in that kind of gamesmanship 673 00:32:36,266 --> 00:32:37,834 with Republicans. 674 00:32:37,834 --> 00:32:44,633 We are highly skeptical that Republican leaders believe it 675 00:32:44,633 --> 00:32:48,533 would be wise as a matter of economic policy or political 676 00:32:48,533 --> 00:32:53,632 strategy to hold the American and global economy hostage again 677 00:32:53,633 --> 00:32:57,934 for the sake of tax cuts for wealthy Americans, a position 678 00:32:57,934 --> 00:33:04,834 that is wildly unpopular in the United States and among the very 679 00:33:04,834 --> 00:33:11,166 constituents that sent members of Congress to Washington. 680 00:33:11,166 --> 00:33:14,833 It is wildly irresponsible to suggest that that is the 681 00:33:14,834 --> 00:33:16,433 appropriate approach to take. 682 00:33:16,433 --> 00:33:24,033 It is simply Congress's duty to pay its bills, to pay for 683 00:33:24,033 --> 00:33:27,533 the expenses that Congress itself authorized. 684 00:33:27,533 --> 00:33:29,100 And we expect Congress to take action. 685 00:33:29,100 --> 00:33:32,766 The President is absolutely firm on this. 686 00:33:32,767 --> 00:33:36,400 Congress needs to act without drama, without delay, to ensure 687 00:33:36,400 --> 00:33:38,333 that we do not default. 688 00:33:38,333 --> 00:33:40,734 It would be wildly irresponsible to do otherwise. 689 00:33:40,734 --> 00:33:41,600 The Press: And you say you were engaged. 690 00:33:41,600 --> 00:33:44,399 Does that suggest that you would consider raising the 691 00:33:44,400 --> 00:33:45,500 debt limit unilaterally? 692 00:33:45,500 --> 00:33:47,667 I know that that was something that was discussed in 2011. 693 00:33:47,667 --> 00:33:50,100 Mr. Carney: Again, I just think it's highly unlikely that Republicans would 694 00:33:50,100 --> 00:33:52,100 want to go down that road again. 695 00:33:52,100 --> 00:33:57,265 Not only was what happened in the summer of 2011 terrible for 696 00:33:57,266 --> 00:34:00,200 the American economy, terrible for the American middle class, 697 00:34:00,200 --> 00:34:03,700 terrible for American business, it was terrible 698 00:34:03,700 --> 00:34:05,333 for the Republican Party. 699 00:34:05,333 --> 00:34:06,633 It was bad politics. 700 00:34:06,633 --> 00:34:11,000 I believe it was shortly after that debacle that public 701 00:34:11,000 --> 00:34:15,266 approval ratings of Congress dipped into the single digits. 702 00:34:15,266 --> 00:34:20,066 So putting aside doing the right thing, putting aside wise 703 00:34:20,065 --> 00:34:23,766 economic policy, putting aside the idea that you should put the 704 00:34:23,766 --> 00:34:27,734 country and the economy first, as pure politics, it just 705 00:34:27,734 --> 00:34:29,567 doesn't seem plausible to me that they would want to travel 706 00:34:29,567 --> 00:34:30,567 that road. 707 00:34:30,567 --> 00:34:31,699 The Press: But they maintained their majority, right? 708 00:34:31,699 --> 00:34:33,766 I mean, this is the argument we have with them all the time, and 709 00:34:33,766 --> 00:34:35,933 they say, look, 12 percent and we got reelected with that. 710 00:34:35,934 --> 00:34:38,433 So I don't quite understand why you guys are so convinced that 711 00:34:38,433 --> 00:34:40,533 there's political pressure bearing down on them when 712 00:34:40,533 --> 00:34:41,533 they've retained their majority. 713 00:34:41,533 --> 00:34:45,799 Mr. Carney: Again, I think you have heard and seen public statements by 714 00:34:45,800 --> 00:34:50,000 business leaders, some of -- or many of whom are not necessarily 715 00:34:50,000 --> 00:34:52,632 natural allies of the Democratic Party or the President of the 716 00:34:52,632 --> 00:34:57,966 United States, who are extremely alarmed by that kind of talk 717 00:34:57,967 --> 00:35:01,834 being put forward by some Republicans in Congress. 718 00:35:01,834 --> 00:35:03,667 I don't believe you've seen any Republican leaders 719 00:35:03,667 --> 00:35:04,667 embrace that strategy. 720 00:35:04,667 --> 00:35:08,767 And it's funny because some of who are apparently suggesting 721 00:35:08,767 --> 00:35:11,200 this to the press describe it as a doomsday strategy, 722 00:35:11,200 --> 00:35:14,232 which is ironic indeed because the doom would 723 00:35:14,233 --> 00:35:17,633 befall the country and the economy, and does not seem 724 00:35:17,633 --> 00:35:19,299 like wise politics. 725 00:35:19,300 --> 00:35:21,767 The Press: Jay, some government agencies are saying that they are being 726 00:35:21,767 --> 00:35:25,000 asked by the White House to prepare for sequestration cuts. 727 00:35:25,000 --> 00:35:26,567 Is this a government-wide directive? 728 00:35:26,567 --> 00:35:28,000 Can you talk more about that? 729 00:35:28,000 --> 00:35:31,700 Mr. Carney: I can and I will. 730 00:35:32,734 --> 00:35:34,533 The administration remains focused on reaching agreement 731 00:35:34,533 --> 00:35:37,500 as we've been discussing on a balanced deficit reduction plan 732 00:35:37,500 --> 00:35:39,333 that avoids sequestration. 733 00:35:39,333 --> 00:35:41,200 Leaders of both parties have pledged to work together in 734 00:35:41,200 --> 00:35:44,332 the coming weeks, and we are confident, as I just said, 735 00:35:44,333 --> 00:35:46,300 that we can reach an agreement. 736 00:35:46,300 --> 00:35:50,567 However, with less than one month left before a potential 737 00:35:50,567 --> 00:35:53,467 sequestration order would have to be issued, the Office of 738 00:35:53,467 --> 00:35:56,400 Management and Budget must take certain steps to ensure the 739 00:35:56,400 --> 00:35:59,266 administration is ready to issue such an order should Congress 740 00:35:59,266 --> 00:36:00,333 fail to act. 741 00:36:00,333 --> 00:36:02,967 Earlier this week, OMB issued a request to federal agencies 742 00:36:02,967 --> 00:36:06,033 for additional information, to finalize calculations on 743 00:36:06,033 --> 00:36:08,000 the spending reductions that would be required. 744 00:36:08,000 --> 00:36:10,834 This action should not be read -- to anticipate your next 745 00:36:10,834 --> 00:36:13,200 question -- as a change in the administration's commitment to 746 00:36:13,200 --> 00:36:15,866 reach an agreement and avoid sequestration. 747 00:36:15,867 --> 00:36:19,367 OMB is simply ensuring that the administration is prepared, 748 00:36:19,367 --> 00:36:21,700 should it become necessary to issue such an order. 749 00:36:21,700 --> 00:36:25,232 OMB will continue to consult with agencies and will provide 750 00:36:25,233 --> 00:36:26,834 additional guidance as needed. 751 00:36:26,834 --> 00:36:30,966 This is just acting responsibly because of the potential for 752 00:36:30,967 --> 00:36:31,834 this happening. 753 00:36:31,834 --> 00:36:33,433 The Press: Should companies put out layoff notices then? 754 00:36:33,433 --> 00:36:35,467 Because before the election, companies were being told, 755 00:36:35,467 --> 00:36:37,333 don't put out layoff notices to scare people. 756 00:36:37,333 --> 00:36:39,633 If the administration is now doing this, should people be 757 00:36:39,633 --> 00:36:41,466 notified about potential layoffs? 758 00:36:41,467 --> 00:36:44,367 Mr. Carney: Well, again, we believe firmly that a deal is possible. 759 00:36:44,367 --> 00:36:47,600 I think that you've seen again and again in recent 760 00:36:47,600 --> 00:36:51,100 days Republicans agreeing with the principle that we ought to 761 00:36:51,100 --> 00:36:54,667 extend tax cuts for the middle class. 762 00:36:54,667 --> 00:36:58,433 That alone, by passing the Senate bill, would mitigate 763 00:36:58,433 --> 00:37:01,667 a substantial portion of the so-called fiscal cliff. 764 00:37:01,667 --> 00:37:03,100 Obviously, there would be more work to do. 765 00:37:03,100 --> 00:37:07,799 But taking that action would, as I said earlier, overcome what 766 00:37:07,800 --> 00:37:14,500 seems to be the largest obstacle to a near-term agreement and the 767 00:37:14,500 --> 00:37:17,800 first stage of what would be a two-stage agreement that would 768 00:37:17,800 --> 00:37:23,500 ensure that rates went up for the top 2 percent, that that 769 00:37:23,500 --> 00:37:27,700 revenue would be locked in, commitments for spending cuts 770 00:37:27,700 --> 00:37:30,232 would be in place, and commitments to engage 771 00:37:30,233 --> 00:37:35,467 in a process of both tax reform and entitlement reform would be 772 00:37:35,467 --> 00:37:36,467 in place. 773 00:37:36,467 --> 00:37:40,333 And I think that this is an opportunity for Democrats and 774 00:37:40,333 --> 00:37:42,400 Republicans to do something very significant, do something 775 00:37:42,400 --> 00:37:46,667 important that represents goals that this President has and that 776 00:37:46,667 --> 00:37:51,467 Republican leaders have, which is to put our economy on sounder 777 00:37:51,467 --> 00:37:54,266 fiscal footing and do it in a way that helps the -- that 778 00:37:54,266 --> 00:37:58,467 allows the economy to continue to grow and create jobs. 779 00:37:58,467 --> 00:38:00,100 The Press: Can I ask you a question not about the -- 780 00:38:00,100 --> 00:38:00,933 Mr. Carney: We spent a lot of time here. 781 00:38:00,934 --> 00:38:01,633 I'll make it to Peter. 782 00:38:01,633 --> 00:38:03,966 I'll come back this way. 783 00:38:03,967 --> 00:38:05,800 The Press: I get that you think that the idea of using the debt ceiling 784 00:38:05,800 --> 00:38:07,867 is a bad idea, bad politics, and all that. 785 00:38:07,867 --> 00:38:09,867 What is the last view today, though, 786 00:38:09,867 --> 00:38:11,533 of the 14th Amendment argument? 787 00:38:11,533 --> 00:38:15,000 Is there a constitutional power vested in the President to do 788 00:38:15,000 --> 00:38:17,166 this by executive authority as far as you all are concerned? 789 00:38:17,166 --> 00:38:18,700 Mr. Carney: I have no update on that view. 790 00:38:18,700 --> 00:38:20,933 I'd refer you to the questions I answered about this back at 791 00:38:20,934 --> 00:38:21,633 the time. 792 00:38:21,633 --> 00:38:24,399 The Press: You said at the time there wasn't enough time to know. 793 00:38:24,400 --> 00:38:27,367 Mr. Carney: I'm not sure that's what I said, but I will ask you to 794 00:38:27,367 --> 00:38:31,166 refresh your memory and I will refresh mine. 795 00:38:31,166 --> 00:38:35,900 The Press: Jay, let me follow that question up by asking if you and the team 796 00:38:35,900 --> 00:38:38,934 think it is so unlikely that the Republicans are going to go down 797 00:38:38,934 --> 00:38:41,333 that road again, why did the President feel compelled to 798 00:38:41,333 --> 00:38:43,567 be so explicit and vehement about this? 799 00:38:43,567 --> 00:38:49,867 Mr. Carney: Because we have seen some inclinations by some Republicans 800 00:38:49,867 --> 00:38:52,567 again -- as far as I know, disavowed by leaders -- to 801 00:38:52,567 --> 00:38:54,200 engage in that game again. 802 00:38:54,200 --> 00:38:58,734 The Press: Speaker Boehner did say if you guys want to increase the debt 803 00:38:58,734 --> 00:39:01,100 limit, there will be a price for it. 804 00:39:01,100 --> 00:39:02,734 I assume that's what the President was talking about. 805 00:39:02,734 --> 00:39:06,600 Mr. Carney: Well, I think I said very explicitly in response to that 806 00:39:06,600 --> 00:39:10,232 -- and I speak for the President -- that to do so, to demand a 807 00:39:10,233 --> 00:39:13,967 political price for Congress to do its job responsibly, which is 808 00:39:13,967 --> 00:39:17,633 to ensure that the United States of America pays its bills, would 809 00:39:17,633 --> 00:39:19,200 be wildly irresponsible. 810 00:39:19,200 --> 00:39:20,866 The Press: So you are taking that threat seriously. 811 00:39:20,867 --> 00:39:22,467 Mr. Carney: Well, we have to prepare. 812 00:39:22,467 --> 00:39:27,867 We have to answer questions and state clearly what our 813 00:39:27,867 --> 00:39:29,600 views on this are. 814 00:39:29,600 --> 00:39:32,232 I don't believe in the end that Republicans want to do that, not 815 00:39:32,233 --> 00:39:36,767 because we're telling them it's a bad idea, but because doing 816 00:39:36,767 --> 00:39:40,633 great harm to the American economy, doing great harm to 817 00:39:40,633 --> 00:39:43,966 American business does not seem like a step that they would want 818 00:39:43,967 --> 00:39:47,633 to take, especially when you have a process in place here and 819 00:39:47,633 --> 00:39:50,700 an opportunity to work with this President to lock in substantial 820 00:39:50,700 --> 00:39:54,200 savings, to lock in substantial deficit reduction, and to do so 821 00:39:54,200 --> 00:39:57,133 in a way that is balanced and fair. 822 00:39:57,133 --> 00:39:59,299 And that's where we are today. 823 00:39:59,300 --> 00:40:02,600 Some of the ideas that have been floated about engaging in this 824 00:40:02,600 --> 00:40:04,567 process suggest that Republicans would simply vote to extend 825 00:40:04,567 --> 00:40:09,734 middle-class tax cuts, let the Clinton-era rates rise for the 826 00:40:09,734 --> 00:40:13,933 high-wage earners, and then engage in 827 00:40:13,934 --> 00:40:16,667 debt ceiling brinkmanship. 828 00:40:16,667 --> 00:40:20,232 And one has to ask, since the reason why they would do that 829 00:40:20,233 --> 00:40:23,967 as opposed to reach a deal now is because they oppose letting 830 00:40:23,967 --> 00:40:29,000 the rates go up doesn't make a lot of sense to me strategically. 831 00:40:29,000 --> 00:40:30,800 The Press: Here's what you said last time. 832 00:40:30,800 --> 00:40:32,200 You said, "You can have an esoteric -- 833 00:40:32,200 --> 00:40:33,265 Mr. Carney: That was very fast. 834 00:40:33,266 --> 00:40:34,800 (laughter) 835 00:40:34,800 --> 00:40:36,367 The Press: "You can have an esoteric discussion about constitutional 836 00:40:36,367 --> 00:40:38,633 law and what could or should not be, but we don't have the luxury 837 00:40:38,633 --> 00:40:39,466 or the time. 838 00:40:39,467 --> 00:40:40,800 The law is as it is." 839 00:40:40,800 --> 00:40:42,300 You didn't have time then. 840 00:40:42,300 --> 00:40:43,066 It's been a year. 841 00:40:43,066 --> 00:40:44,433 Is there any study that's been done by 842 00:40:44,433 --> 00:40:45,333 the administration since then? 843 00:40:45,333 --> 00:40:46,100 Mr. Carney: Not that I'm aware of. 844 00:40:46,100 --> 00:40:52,033 So what I said then stands to this day. 845 00:40:52,033 --> 00:40:57,000 The Press: Is it theoretically possible that you could get a solution in 846 00:40:57,000 --> 00:41:01,200 the short term where the rates go up, but not all the way to 847 00:41:01,200 --> 00:41:06,366 39.6, and you can -- by limited capping of deductions, you could 848 00:41:06,367 --> 00:41:09,166 make up the revenue you need without doing 849 00:41:09,166 --> 00:41:12,066 full-scale tax reforms? 850 00:41:12,066 --> 00:41:16,799 Mr. Furman: I mean, the President has been clear that rates need to go up. 851 00:41:16,800 --> 00:41:19,834 The President has been clear that there is a plan that works 852 00:41:19,834 --> 00:41:22,799 extremely well, which is to let those rates go back 853 00:41:22,800 --> 00:41:28,633 up to the Clinton rates and then do additional tax reform 854 00:41:28,633 --> 00:41:29,767 on top of that. 855 00:41:29,767 --> 00:41:32,533 It's important not just that you're trying to replace the 856 00:41:32,533 --> 00:41:34,667 revenue from decoupling, but you're putting yourself in a 857 00:41:34,667 --> 00:41:38,165 position where there's still scope to do tax reform. 858 00:41:38,166 --> 00:41:41,233 So you wouldn't want to do something where any additional 859 00:41:41,233 --> 00:41:44,033 tax reform, the only tax expenditures left, would be 860 00:41:44,033 --> 00:41:45,066 those for the middle class. 861 00:41:45,066 --> 00:41:48,734 So what tax reform became was an exercise in raising taxes on the 862 00:41:48,734 --> 00:41:51,000 middle class, because that's not something we'd want to do. 863 00:41:51,000 --> 00:41:55,433 It's not something that Congress would want to do. 864 00:41:55,433 --> 00:41:58,900 But the President has always said -- wants to hear ideas, 865 00:41:58,900 --> 00:42:01,200 engage in a discussion of those ideas. 866 00:42:01,200 --> 00:42:04,899 But whether you could design any of those in a way that again 867 00:42:04,900 --> 00:42:08,300 meets that plausible, desirable leaving room for the type of tax 868 00:42:08,300 --> 00:42:10,467 reform that we think we need to do as a country, do that all in 869 00:42:10,467 --> 00:42:14,300 the next couple of weeks, is something that we haven't seen. 870 00:42:14,300 --> 00:42:15,500 Mr. Carney: Can I get one more for Jason? 871 00:42:15,500 --> 00:42:17,400 I'm going to let him go and then stay if you have questions on 872 00:42:17,400 --> 00:42:18,400 other subjects. 873 00:42:18,400 --> 00:42:20,166 Anybody have -- for Jason? 874 00:42:20,166 --> 00:42:22,734 The Press: I was curious. 875 00:42:22,734 --> 00:42:24,933 This is more of a question for Jay, but going back to 876 00:42:24,934 --> 00:42:26,467 the -- sorry. 877 00:42:26,467 --> 00:42:29,300 But going back to the summer of last year and the $1.2 million 878 00:42:29,300 --> 00:42:32,500 that the President agreed that you could raise without 879 00:42:32,500 --> 00:42:36,166 increasing the rates, was there anything that was different? 880 00:42:36,166 --> 00:42:39,333 I mean, did he really think at that time that you could have 881 00:42:39,333 --> 00:42:42,066 tax reform in an election year? 882 00:42:42,066 --> 00:42:45,533 It seemed very -- that we would be back here at the same place 883 00:42:45,533 --> 00:42:48,834 we are right now with the Bush-era tax cuts ready to 884 00:42:48,834 --> 00:42:51,567 expire -- because it's an election year and we all know 885 00:42:51,567 --> 00:42:54,900 in Washington that a lot doesn't go on, and tax reform is a big 886 00:42:54,900 --> 00:42:56,867 thing to take on. 887 00:42:56,867 --> 00:42:57,867 Mr. Furman: I think two things. 888 00:42:57,867 --> 00:43:02,233 One is that there are two sets of issues when you have to do 889 00:43:02,233 --> 00:43:02,967 tax reform. 890 00:43:02,967 --> 00:43:04,967 One is some of the most controversial issues about 891 00:43:04,967 --> 00:43:08,734 how much revenue, what the distribution of that revenue is. 892 00:43:08,734 --> 00:43:11,133 And then, a second set of things that are also really complicated 893 00:43:11,133 --> 00:43:14,100 and controversial about how you put that whole plan together. 894 00:43:14,100 --> 00:43:16,299 The goal of those talks was to try to settle some of the 895 00:43:16,300 --> 00:43:19,567 biggest, most controversial questions in stage one so that 896 00:43:19,567 --> 00:43:23,166 stage two would have become a more technical exercise, 897 00:43:23,166 --> 00:43:26,033 admittedly an incredibly fraught and incredibly political, and 898 00:43:26,033 --> 00:43:29,866 incredibly complicated one, but one that some of the very 899 00:43:29,867 --> 00:43:34,000 biggest questions had been settled at the leadership level. 900 00:43:34,000 --> 00:43:36,567 And two, the President's attitude has always been 901 00:43:36,567 --> 00:43:39,934 that he wants to get done the things that we need to get done 902 00:43:39,934 --> 00:43:41,200 in this country. 903 00:43:41,200 --> 00:43:45,567 And if Republicans were willing to do tax reform in the year 904 00:43:45,567 --> 00:43:49,100 2012 that would have raised revenue, he absolutely would 905 00:43:49,100 --> 00:43:51,333 have been willing and thrilled to do that with them. 906 00:43:51,333 --> 00:43:54,166 And that's why he was engaged in those negotiations. 907 00:43:54,166 --> 00:43:57,133 It's gotten until now to the point where you have 908 00:43:57,133 --> 00:43:59,332 any indication of a willingness to -- 909 00:43:59,333 --> 00:44:02,633 The Press: Was he kicking it down the road, though, the tax reform part, 910 00:44:02,633 --> 00:44:05,966 to see who won the election and then whoever gets the leverage? 911 00:44:05,967 --> 00:44:08,700 Mr. Furman: I mean, we weren't -- Speaker Boehner was the 912 00:44:08,700 --> 00:44:12,100 one that withdrew from those talks, not President Obama. 913 00:44:12,100 --> 00:44:15,467 President Obama went the extra mile to try to make those talks 914 00:44:15,467 --> 00:44:19,900 succeed, because he thought it was important for the economy 915 00:44:19,900 --> 00:44:23,433 and important for our long-term economic growth. 916 00:44:23,433 --> 00:44:24,033 So -- 917 00:44:24,033 --> 00:44:25,333 The Press: When you say the "extra mile," do you mean moving the goal 918 00:44:25,333 --> 00:44:26,266 post the extra mile? 919 00:44:26,266 --> 00:44:28,433 Because that's how they -- 920 00:44:28,433 --> 00:44:29,400 Mr. Furman: Absolutely not. 921 00:44:29,400 --> 00:44:31,166 I mean, Hans, he was -- 922 00:44:31,166 --> 00:44:32,600 The Press: I mean, we can get into this dispute on where the numbers 923 00:44:32,600 --> 00:44:35,000 were and how close they were. 924 00:44:35,000 --> 00:44:37,467 Mr. Furman: I mean, I don't -- there's like a lot of history books one can 925 00:44:37,467 --> 00:44:43,900 already start reading about last summer, and I personally have 926 00:44:43,900 --> 00:44:46,100 avoided reading any of them. 927 00:44:46,100 --> 00:44:50,799 But we've always been clear -- I mean, our central things have 928 00:44:50,800 --> 00:44:52,967 been the amount of debt reduction we need to get 929 00:44:52,967 --> 00:44:56,500 the debt on a downward slope have been protecting the middle 930 00:44:56,500 --> 00:45:00,934 class -- households that make up to $250,000 a year; have been a 931 00:45:00,934 --> 00:45:02,800 balanced plan in which revenue is making a 932 00:45:02,800 --> 00:45:04,934 meaningful contribution. 933 00:45:04,934 --> 00:45:07,500 Those were consistent when the President ran in 2008. 934 00:45:07,500 --> 00:45:09,300 They were consistent in the talks last time. 935 00:45:09,300 --> 00:45:11,300 They were consistent in this campaign. 936 00:45:11,300 --> 00:45:13,500 And that's where he's approaching it from now. 937 00:45:13,500 --> 00:45:15,700 The Press: The only thing that's changed is that you all have won the 938 00:45:15,700 --> 00:45:18,366 election and there's a dynamic that's changed. 939 00:45:18,367 --> 00:45:21,367 So are you saying that now the President has the political 940 00:45:21,367 --> 00:45:25,233 capital and a mandate to raise the taxes right now? 941 00:45:25,233 --> 00:45:29,300 Mr. Furman: First of all, I'll let Jay answer questions of that nature. 942 00:45:29,300 --> 00:45:33,467 But let me also say we've done a lot of work in the last year. 943 00:45:33,467 --> 00:45:35,800 We didn't just sort of sit here twiddling our thumbs. 944 00:45:35,800 --> 00:45:37,967 We've known that we were going to be in this type 945 00:45:37,967 --> 00:45:40,433 of conversation in November and December. 946 00:45:40,433 --> 00:45:42,767 So just at a purely analytical level, 947 00:45:42,767 --> 00:45:45,466 we know more about tax reform. 948 00:45:45,467 --> 00:45:47,066 We know more about tax expenditures. 949 00:45:47,066 --> 00:45:50,799 We know more about all of those topics now than we've 950 00:45:50,800 --> 00:45:51,800 known before. 951 00:45:51,800 --> 00:45:55,667 And all of that understanding, all of the types of math I 952 00:45:55,667 --> 00:46:00,933 walked you through inform the positions the President 953 00:46:00,934 --> 00:46:01,934 has taken. 954 00:46:01,934 --> 00:46:03,734 And the positions he's taken are we need $4 trillion, 955 00:46:03,734 --> 00:46:05,600 we need balance, we need this amount of revenue. 956 00:46:05,600 --> 00:46:08,900 And then, you do a bunch of math and you spend a bunch of time on 957 00:46:08,900 --> 00:46:11,033 it, and it turns out you don't see a way to get that without 958 00:46:11,033 --> 00:46:11,834 higher rates. 959 00:46:11,834 --> 00:46:13,933 The Press: I'm sorry to belabor this, but are you saying that you didn't 960 00:46:13,934 --> 00:46:16,567 know some of the things you know now, that you didn't back then 961 00:46:16,567 --> 00:46:17,367 that you know now? 962 00:46:17,367 --> 00:46:18,200 Mr. Furman: No, I'm not that saying that now. 963 00:46:18,200 --> 00:46:21,033 I'm just saying I'm giving you -- first of all, as I said then, 964 00:46:21,033 --> 00:46:24,100 there was always this structure that if tax reform didn't 965 00:46:24,100 --> 00:46:26,467 succeed -- and one of the ways it wouldn't have succeeded is if 966 00:46:26,467 --> 00:46:28,567 it raised taxes on the middle class or eliminated the 967 00:46:28,567 --> 00:46:31,433 charitable deduction -- that as of January 1st, 968 00:46:31,433 --> 00:46:34,967 2013, the top rates would have reverted to what they were in 969 00:46:34,967 --> 00:46:35,967 the Clinton era. 970 00:46:35,967 --> 00:46:37,700 So that was built into the agreement then. 971 00:46:37,700 --> 00:46:40,533 There was time to explore something else. 972 00:46:40,533 --> 00:46:43,767 Now we're talking about trying to pass that something else in 973 00:46:43,767 --> 00:46:45,299 the next month. 974 00:46:45,300 --> 00:46:47,900 Everything we know about what it would mean to pass that 975 00:46:47,900 --> 00:46:51,934 something else in the next month tells us that it can't plausibly 976 00:46:51,934 --> 00:46:54,567 be done without higher rates. 977 00:46:54,567 --> 00:46:59,433 Every argument to the contrary has had flaws in it -- very, 978 00:46:59,433 --> 00:47:02,133 very serious flaws, like eliminating completely the 979 00:47:02,133 --> 00:47:03,767 charitable deduction. 980 00:47:03,767 --> 00:47:06,966 We're still open for hearing more of those ideas. 981 00:47:06,967 --> 00:47:09,734 We're not very optimistic that somebody is going to come up 982 00:47:09,734 --> 00:47:13,200 with some, because we have, as I said, looked at this even more 983 00:47:13,200 --> 00:47:14,933 over the course of the past year. 984 00:47:14,934 --> 00:47:17,767 But of course we're always open to hearing ideas. 985 00:47:17,767 --> 00:47:19,033 Mr. Carney: Really quickly, one more. 986 00:47:19,033 --> 00:47:20,600 Last one. 987 00:47:20,600 --> 00:47:23,266 The Press: In your studies, and you said you looked at over the course of 988 00:47:23,266 --> 00:47:25,200 the last year since the last time we went through these 989 00:47:25,200 --> 00:47:28,265 negotiations -- the last time we went through these negotiations 990 00:47:28,266 --> 00:47:31,133 the President was open to the so-called chained CPI 991 00:47:31,133 --> 00:47:32,600 of Social Security. 992 00:47:32,600 --> 00:47:35,500 What has changed -- or, I mean, is Social Security in better 993 00:47:35,500 --> 00:47:36,967 shape now than it was a year and a half ago? 994 00:47:36,967 --> 00:47:38,600 Why is the President taking it off the table? 995 00:47:38,600 --> 00:47:41,033 What has changed other than the political calculation? 996 00:47:41,033 --> 00:47:42,633 Mr. Furman: I'll let Jay answer a certain amount to that. 997 00:47:42,633 --> 00:47:46,767 But in a negotiation there is always a give-and- take. 998 00:47:46,767 --> 00:47:49,133 And right after those negotiations ended the President 999 00:47:49,133 --> 00:47:52,734 put out his plan for the super committee, which if the super 1000 00:47:52,734 --> 00:47:55,900 committee had adopted would have averted all of these problems. 1001 00:47:55,900 --> 00:47:58,900 His plan for the super committee reflected where he's coming 1002 00:47:58,900 --> 00:48:01,767 from, what he thinks are the best policies to move this 1003 00:48:01,767 --> 00:48:03,700 country forward, protect the middle class. 1004 00:48:03,700 --> 00:48:07,767 That plan did not include superlative CPI or H67 1005 00:48:07,767 --> 00:48:08,767 for Medicare. 1006 00:48:08,767 --> 00:48:12,100 And that was in September of last year that that 1007 00:48:12,100 --> 00:48:13,100 was put forward. 1008 00:48:13,100 --> 00:48:16,232 Mr. Carney: And if I could just, Mike, just add that the President has made 1009 00:48:16,233 --> 00:48:20,734 clear what his -- the way that he would achieve health care 1010 00:48:20,734 --> 00:48:25,100 entitlement savings to the tune of -- well, total entitlement 1011 00:48:25,100 --> 00:48:27,799 savings, additional $600 billion, a substantial portion 1012 00:48:27,800 --> 00:48:29,500 of that from health care entitlements. 1013 00:48:29,500 --> 00:48:31,000 It's in his plan. 1014 00:48:31,000 --> 00:48:34,767 And he has made clear that when it comes to spending cuts and 1015 00:48:34,767 --> 00:48:37,734 further savings, he understands that he would be negotiating 1016 00:48:37,734 --> 00:48:42,767 with Congress and is open to other ideas, and is willing 1017 00:48:42,767 --> 00:48:44,332 to make tough choices. 1018 00:48:44,333 --> 00:48:46,934 I'm not going to get into specifically what would or 1019 00:48:46,934 --> 00:48:51,100 wouldn't be part of that discussion, but it is certainly 1020 00:48:51,100 --> 00:48:54,000 the case that the President recognizes that that would be 1021 00:48:54,000 --> 00:48:58,133 a negotiation, and that it would require tough choices 1022 00:48:58,133 --> 00:48:59,600 by both sides. 1023 00:48:59,600 --> 00:49:02,600 What I would note, however, is that the President has put 1024 00:49:02,600 --> 00:49:07,567 forward, in detail, specific entitlement savings, and we 1025 00:49:07,567 --> 00:49:10,834 have not seen that yet -- at least not to the same level 1026 00:49:10,834 --> 00:49:12,567 of specificity -- from the Republicans. 1027 00:49:12,567 --> 00:49:14,300 I would also note that on the two measures that you talked 1028 00:49:14,300 --> 00:49:18,000 about, they alone raise -- would save far less than what the 1029 00:49:18,000 --> 00:49:23,834 President has proposed in that 10-year window. 1030 00:49:23,834 --> 00:49:27,299 So the President is serious about it. 1031 00:49:27,300 --> 00:49:30,000 He's serious about balance in his approach. 1032 00:49:30,000 --> 00:49:32,834 And he's serious about the goal of attaining, when you combine 1033 00:49:32,834 --> 00:49:36,399 everything together, deficit reduction, long-term, to the 1034 00:49:36,400 --> 00:49:40,367 tune of $4 trillion, and that requires tough 1035 00:49:40,367 --> 00:49:41,834 choices by everyone. 1036 00:49:41,834 --> 00:49:45,200 The tough choice that we have not yet seen from the Republican 1037 00:49:45,200 --> 00:49:47,433 Party is, at least at the leadership level, the 1038 00:49:47,433 --> 00:49:50,367 acknowledgment that rates have to go up in order to achieve the 1039 00:49:50,367 --> 00:49:56,166 revenue levels, as Jason has so amply laid out, that are 1040 00:49:56,166 --> 00:49:57,800 required for a balanced package. 1041 00:49:57,800 --> 00:49:59,633 The Press: -- slight adjustment that Social Security could be in the second 1042 00:49:59,633 --> 00:50:01,533 step that you were discussing with Jessica earlier? 1043 00:50:01,533 --> 00:50:03,299 Mr. Carney: Let me let Jason go. Thank you. 1044 00:50:03,300 --> 00:50:04,400 I know he has meetings and stuff. 1045 00:50:04,400 --> 00:50:08,200 I'll attempt to answer questions on this subject 1046 00:50:08,200 --> 00:50:09,200 even in his absence. 1047 00:50:09,200 --> 00:50:10,734 But, I'm sorry. Go ahead. 1048 00:50:10,734 --> 00:50:12,633 The Press: Jessica -- you and Jessica were talking earlier about 1049 00:50:12,633 --> 00:50:13,933 the two-step process. 1050 00:50:13,934 --> 00:50:16,367 It could be back on the table, this adjustment to Social 1051 00:50:16,367 --> 00:50:17,667 Security in the second step. 1052 00:50:17,667 --> 00:50:20,567 Mr. Carney: Entitlement reforms would explicitly be on the table, 1053 00:50:20,567 --> 00:50:21,133 and -- 1054 00:50:21,133 --> 00:50:22,133 The Press: But not just Medicare and Medicaid, but also 1055 00:50:22,133 --> 00:50:23,100 Social Security? 1056 00:50:23,100 --> 00:50:24,734 Mr. Carney: Well, let's back up. 1057 00:50:24,734 --> 00:50:28,467 On Social Security, we have said that, when we're talking about 1058 00:50:28,467 --> 00:50:32,066 deficit reduction, what economists acknowledge, 1059 00:50:32,066 --> 00:50:35,667 which is that Social Security is not a driver of our deficits. 1060 00:50:35,667 --> 00:50:40,299 And having said that, the President has always expressed 1061 00:50:40,300 --> 00:50:43,166 interest in working with Congress to take steps to 1062 00:50:43,166 --> 00:50:45,734 further strengthen Social Security because it's such 1063 00:50:45,734 --> 00:50:50,933 a vital program for our senior citizens and it needs to be in 1064 00:50:50,934 --> 00:50:53,400 place for generations to come. 1065 00:50:53,400 --> 00:50:57,467 And he has been willing, and is willing, to have those 1066 00:50:57,467 --> 00:51:00,500 conversations on a separate track, but it is not the case 1067 00:51:00,500 --> 00:51:03,800 that Social Security is a driver of the deficits 1068 00:51:03,800 --> 00:51:06,266 that we are trying to address through a long-term deficit 1069 00:51:06,266 --> 00:51:07,600 reduction package. 1070 00:51:07,600 --> 00:51:08,933 The Press: So wait, you talk about them at the same time so 1071 00:51:08,934 --> 00:51:09,934 long as they are not on the same track? 1072 00:51:09,934 --> 00:51:11,700 Mr. Carney: Well, I'm not going to -- we did go through this a little 1073 00:51:11,700 --> 00:51:14,799 bit back in 2011, and our position hasn't changed. 1074 00:51:14,800 --> 00:51:19,834 As a matter of economic fact, Social Security does not -- 1075 00:51:19,834 --> 00:51:21,033 is not a driver of our deficits. 1076 00:51:21,033 --> 00:51:22,734 Health care entitlements certainly are -- Medicare 1077 00:51:22,734 --> 00:51:23,834 and Medicaid. 1078 00:51:23,834 --> 00:51:28,600 Tax expenditures and a lack of revenue from high-income 1079 00:51:28,600 --> 00:51:33,767 Americans is certainly a factor, and those are issues that would 1080 00:51:33,767 --> 00:51:36,533 be addressed in the package that we're talking about. 1081 00:51:36,533 --> 00:51:38,834 But the President is very interested, as he's always said, 1082 00:51:38,834 --> 00:51:42,799 in having conversations and working on proposals that would 1083 00:51:42,800 --> 00:51:46,066 strengthen Social Security for the long term. Jake. 1084 00:51:46,066 --> 00:51:49,533 The Press: Just to change the subject for a second, what qualities does the 1085 00:51:49,533 --> 00:51:53,033 President look for when he's going to pick an ambassador? 1086 00:51:53,033 --> 00:51:55,299 Especially to an important ally like France -- France 1087 00:51:55,300 --> 00:51:56,367 or the U.K. 1088 00:51:56,367 --> 00:51:57,266 The Press: Someone very well dressed. 1089 00:51:57,266 --> 00:51:58,066 (laughter) 1090 00:51:58,066 --> 00:52:01,033 Mr. Carney: I anticipated the question you're asking, and I can tell 1091 00:52:01,033 --> 00:52:04,000 you in advance -- I will answer the question, but that I have no 1092 00:52:04,000 --> 00:52:05,000 personnel announcements. 1093 00:52:05,000 --> 00:52:08,734 I'm not going to engage in speculation about possible 1094 00:52:08,734 --> 00:52:10,100 personnel announcements. 1095 00:52:10,100 --> 00:52:12,866 I think that the President, in all of his personnel 1096 00:52:12,867 --> 00:52:19,967 appointments, looks for talent, wisdom and character in his 1097 00:52:19,967 --> 00:52:23,967 appointees, and he would do that regardless of the position. 1098 00:52:23,967 --> 00:52:28,600 The Press: Is it important for a diplomat to be diplomatic? 1099 00:52:28,600 --> 00:52:29,433 Mr. Carney: One of the -- 1100 00:52:29,433 --> 00:52:31,867 (laughter) 1101 00:52:31,867 --> 00:52:33,834 -- I mean, another way of addressing that is to answer 1102 00:52:33,834 --> 00:52:35,933 the question that there have been enormously effective 1103 00:52:35,934 --> 00:52:39,934 diplomats in this country's history who have not necessarily 1104 00:52:39,934 --> 00:52:41,166 risen through the diplomatic corps. 1105 00:52:41,166 --> 00:52:42,867 Now, we have enormously talented -- 1106 00:52:42,867 --> 00:52:45,500 The Press: I mean, just even in their personal lives, or pop culture, 1107 00:52:45,500 --> 00:52:46,533 you are -- 1108 00:52:46,533 --> 00:52:47,467 Mr. Carney: I think -- 1109 00:52:47,467 --> 00:52:48,333 The Press: I mean -- 1110 00:52:48,333 --> 00:52:53,000 Mr. Carney: I don't know -- I understand that that's a rhetorical 1111 00:52:53,000 --> 00:52:57,066 question, and diplomacy is effectively performed 1112 00:52:57,066 --> 00:52:57,933 by diplomats. 1113 00:52:57,934 --> 00:53:03,333 But we had one of the greatest diplomats of his generation pass 1114 00:53:03,333 --> 00:53:05,734 away not long ago -- Richard Holbrooke -- and I think 1115 00:53:05,734 --> 00:53:09,500 everyone who knew him or who sat across the table from him would 1116 00:53:09,500 --> 00:53:13,033 agree that he was not by anyone's traditional definition 1117 00:53:13,033 --> 00:53:14,767 particularly diplomatic. 1118 00:53:14,767 --> 00:53:19,466 The Press: No, but he was also a brilliant negotiator and -- 1119 00:53:19,467 --> 00:53:23,767 Mr. Carney: So they come in all types and sizes and approaches. 1120 00:53:23,767 --> 00:53:25,533 The Press: Has the President seen "The Devil Wears Prada"? 1121 00:53:25,533 --> 00:53:27,232 (laughter) 1122 00:53:27,233 --> 00:53:31,367 The Press: Before we go to -- question, you don't deny that Anna Wintour can 1123 00:53:31,367 --> 00:53:33,066 become ambassador from the United States -- 1124 00:53:33,066 --> 00:53:35,734 Mr. Carney: I will not engage in any speculation about 1125 00:53:35,734 --> 00:53:36,734 personnel announcements. 1126 00:53:36,734 --> 00:53:37,734 I just won't. 1127 00:53:37,734 --> 00:53:39,133 The Press: And what's your -- what's the White House reaction 1128 00:53:39,133 --> 00:53:43,466 to the situation in Egypt at this moment? 1129 00:53:43,467 --> 00:53:47,767 Mr. Carney: Well, that's a broad question that I'm happy to address. 1130 00:53:47,767 --> 00:53:51,600 As you know, we remain concerned with the continuing lack of 1131 00:53:51,600 --> 00:53:54,834 consensus regarding the recent constitutional declarations and 1132 00:53:54,834 --> 00:53:57,767 the handling of the draft constitution in Egypt. 1133 00:53:57,767 --> 00:53:59,734 As Secretary Clinton said earlier today, the current 1134 00:53:59,734 --> 00:54:02,900 situation in Egypt indicates that dialogue between all 1135 00:54:02,900 --> 00:54:06,834 Egyptians is urgently needed and that it must be a two-way 1136 00:54:06,834 --> 00:54:09,567 dialogue that includes a respectful exchange of the 1137 00:54:09,567 --> 00:54:12,967 concerns of the Egyptian people themselves about their 1138 00:54:12,967 --> 00:54:16,533 constitutional process and the substance of their constitution. 1139 00:54:16,533 --> 00:54:20,333 The Egyptian people want and deserve a constitutional process 1140 00:54:20,333 --> 00:54:24,333 that is open, transparent and fair, and does not unduly favor 1141 00:54:24,333 --> 00:54:26,333 one group over any other. 1142 00:54:26,333 --> 00:54:28,700 Democracy depends on strong institutions and the important 1143 00:54:28,700 --> 00:54:31,366 checks and balances that provide accountability. 1144 00:54:31,367 --> 00:54:34,367 We would note the demonstrations supporting both sides of the 1145 00:54:34,367 --> 00:54:38,633 issues so far have been large and generally peaceful. 1146 00:54:38,633 --> 00:54:41,600 As Egyptians continue to express their views, we look to the 1147 00:54:41,600 --> 00:54:44,734 government of Egypt to respect the freedoms of peaceful 1148 00:54:44,734 --> 00:54:48,767 expression and assembly, and to exercise restraint. 1149 00:54:48,767 --> 00:54:50,866 We also continue to call on demonstrators and political 1150 00:54:50,867 --> 00:54:53,367 parties to take all possible measures to avoid confrontation 1151 00:54:53,367 --> 00:54:54,367 and violence. 1152 00:54:54,367 --> 00:54:56,934 We encourage the implementation of a constitution that is seen 1153 00:54:56,934 --> 00:55:00,934 as legitimate by a broad cross section of the Egyptian people, 1154 00:55:00,934 --> 00:55:04,000 across the political spectrum, and that upholds Egypt's 1155 00:55:04,000 --> 00:55:06,700 international human rights commitments, including respect 1156 00:55:06,700 --> 00:55:09,100 for the rights of women, minorities, and Egyptians 1157 00:55:09,100 --> 00:55:10,299 of all faiths. 1158 00:55:10,300 --> 00:55:13,700 The Press: Does the President fully support President Morsi? 1159 00:55:13,700 --> 00:55:17,633 Mr. Carney: Well, the President has an important relationship -- well, 1160 00:55:17,633 --> 00:55:19,066 the United States has a very important relationship 1161 00:55:19,066 --> 00:55:20,700 with Egypt. 1162 00:55:20,700 --> 00:55:23,433 The President has worked effectively with President Morsi 1163 00:55:23,433 --> 00:55:26,967 on key issues, including recently the negotiated 1164 00:55:26,967 --> 00:55:30,066 ceasefire in Gaza. 1165 00:55:30,066 --> 00:55:34,667 We are monitoring the situation, as I just discussed, in Egypt, 1166 00:55:34,667 --> 00:55:41,333 and we call on all sides to allow for a peaceful process 1167 00:55:41,333 --> 00:55:45,700 and to pursue a result that is a constitution that both reflects 1168 00:55:45,700 --> 00:55:49,466 the will of the Egyptian people and upholds Egypt's 1169 00:55:49,467 --> 00:55:51,500 international human rights responsibilities and 1170 00:55:51,500 --> 00:55:53,300 commitments, including respect for the rights of women, 1171 00:55:53,300 --> 00:55:55,467 minorities, and Egyptians of all faiths. 1172 00:55:55,467 --> 00:55:56,200 Leslie. 1173 00:55:56,200 --> 00:55:56,899 The Press: Has President Obama called President Morsi, or does he 1174 00:55:56,900 --> 00:55:57,767 plan to? 1175 00:55:57,767 --> 00:55:58,866 The Press: Can I follow up on that? 1176 00:55:58,867 --> 00:56:00,667 Mr. Carney: I have no foreign leader calls to read out. Yes. 1177 00:56:00,667 --> 00:56:01,633 The Press: Can I follow up on that? 1178 00:56:01,633 --> 00:56:06,332 Can you talk about -- has the December 17th visit by President 1179 00:56:06,333 --> 00:56:09,500 Morsi been postponed, delayed, changed? 1180 00:56:09,500 --> 00:56:11,367 Mr. Carney: Well, I don't have any information to provide 1181 00:56:11,367 --> 00:56:14,633 to you about a foreign leader visit at this time. 1182 00:56:14,633 --> 00:56:15,834 The Press: Is he still coming? 1183 00:56:15,834 --> 00:56:18,767 Mr. Carney: Again, I just don't have any information on that for you. 1184 00:56:18,767 --> 00:56:21,399 The Press: Jay, today The New York Times reported that the White House 1185 00:56:21,400 --> 00:56:23,300 or the President was going to request from Congress 1186 00:56:23,300 --> 00:56:28,233 $45 billion to $55 billion in disaster relief money. 1187 00:56:28,233 --> 00:56:30,867 Is that report accurate? 1188 00:56:30,867 --> 00:56:33,600 Mr. Carney: I can tell you that the administration has already 1189 00:56:33,600 --> 00:56:36,600 obligated more than $2.3 billion to support response 1190 00:56:36,600 --> 00:56:37,600 and recovery efforts. 1191 00:56:37,600 --> 00:56:40,500 The administration is working closely with our partners in the 1192 00:56:40,500 --> 00:56:43,934 states and in Congress, and is in the process of developing a 1193 00:56:43,934 --> 00:56:45,633 request for a supplemental. 1194 00:56:45,633 --> 00:56:48,133 But that process has not been completed and it would be 1195 00:56:48,133 --> 00:56:51,866 premature to speculate on a specific number or even on a 1196 00:56:51,867 --> 00:56:53,133 numerical range. 1197 00:56:53,133 --> 00:56:55,633 The Press: Should there be offsets to pay for that, or would that add to 1198 00:56:55,633 --> 00:56:56,834 the deficit? 1199 00:56:56,834 --> 00:56:59,399 Mr. Carney: I'm not going to get ahead of this process. 1200 00:56:59,400 --> 00:57:05,433 I would anticipate that we would get a request up this week, 1201 00:57:05,433 --> 00:57:07,834 and we can certainly discuss it further then. 1202 00:57:07,834 --> 00:57:09,133 Yes, in the back. 1203 00:57:09,133 --> 00:57:13,366 The Press: On immigration, what's the White House reaction to the surprising 1204 00:57:13,367 --> 00:57:16,633 participation of former President Bush in the debate 1205 00:57:16,633 --> 00:57:20,600 between Republicans on immigration? 1206 00:57:20,600 --> 00:57:22,799 Mr. Carney: I don't have a White House reaction beyond noting what 1207 00:57:22,800 --> 00:57:25,834 I have in the past, which is that President George W. 1208 00:57:25,834 --> 00:57:31,533 Bush supported comprehensive immigration reform, both as 1209 00:57:31,533 --> 00:57:33,667 Governor and as President. 1210 00:57:33,667 --> 00:57:37,366 It's something that President Obama notes ruefully, which is 1211 00:57:37,367 --> 00:57:40,100 that in the past there had been leading Republicans who 1212 00:57:40,100 --> 00:57:42,299 supported comprehensive immigration reform, including 1213 00:57:42,300 --> 00:57:45,867 President Bush, including Senator McCain, who coauthored 1214 00:57:45,867 --> 00:57:48,333 legislation that would have achieved that with Senator 1215 00:57:48,333 --> 00:57:52,367 Kennedy, and that he hopes and anticipates that we will see 1216 00:57:52,367 --> 00:57:57,100 Republican leaders -- elected leaders in Congress look to 1217 00:57:57,100 --> 00:57:59,567 engage in that process because he believes that comprehensive 1218 00:57:59,567 --> 00:58:01,967 immigration reform is very important. 1219 00:58:01,967 --> 00:58:06,967 It's important for our economy and it's obviously important for 1220 00:58:09,867 --> 00:58:13,800 very many people in a community that has been looking to 1221 00:58:13,800 --> 00:58:16,900 Washington to act on this important issue. 1222 00:58:16,900 --> 00:58:20,000 The Press: Talking about Senator McCain, why do you think he has been 1223 00:58:20,000 --> 00:58:22,300 changing his position on immigration? 1224 00:58:22,300 --> 00:58:26,467 Mr. Carney: I would have to direct you to Senator McCain. 1225 00:58:26,467 --> 00:58:27,667 Yes. 1226 00:58:27,667 --> 00:58:29,033 The Press: Jay, I want to go back to something we haven't talked 1227 00:58:29,033 --> 00:58:29,900 about for a while. 1228 00:58:29,900 --> 00:58:32,033 There's been a renewed call for President Obama to issue that 1229 00:58:32,033 --> 00:58:34,567 executive order barring federal contractors from discriminating 1230 00:58:34,567 --> 00:58:36,367 against LGBT workers. 1231 00:58:36,367 --> 00:58:38,400 Over the weekend, Steve Elmendorf, one of his prominent 1232 00:58:38,400 --> 00:58:41,467 supporters in the election, said he's -- the first six months -- 1233 00:58:41,467 --> 00:58:43,033 first six months of next year. 1234 00:58:43,033 --> 00:58:45,400 Will President Obama revisit this idea as he begins his 1235 00:58:45,400 --> 00:58:47,166 second term? 1236 00:58:47,166 --> 00:58:51,734 Mr. Carney: Our position on that hasn't changed, and we point to, 1237 00:58:51,734 --> 00:58:55,834 as you and I have discussed, the process that led to the 1238 00:58:55,834 --> 00:58:59,232 effective repeal of "don't ask, don't tell" as a model for the 1239 00:58:59,233 --> 00:59:01,133 way to approach these issues. 1240 00:59:01,133 --> 00:59:03,165 I don't have any updates for you on our approach. 1241 00:59:03,166 --> 00:59:06,867 The President supports an inclusive ENDA that would 1242 00:59:06,867 --> 00:59:08,500 provide lasting and comprehensive protections 1243 00:59:08,500 --> 00:59:10,834 for LGBT people across the country, 1244 00:59:10,834 --> 00:59:12,466 regardless of whether they happen to work for 1245 00:59:12,467 --> 00:59:13,934 a government contractor. 1246 00:59:13,934 --> 00:59:16,600 And we look forward to continuing to support that 1247 00:59:16,600 --> 00:59:18,667 process and that legislation. 1248 00:59:18,667 --> 00:59:20,100 The Press: So does that rule out the possibility of that order 1249 00:59:20,100 --> 00:59:21,700 happening in the first six months of next year? 1250 00:59:21,700 --> 00:59:22,866 Mr. Carney: Well, again, I'm not going to speculate on 1251 00:59:22,867 --> 00:59:24,834 a hypothetical situation. 1252 00:59:24,834 --> 00:59:30,500 I would simply point to what our position has been on the avenue 1253 00:59:30,500 --> 00:59:35,500 that we believe is the best to pursue broad-based protections 1254 00:59:35,500 --> 00:59:36,867 for LGBT people. 1255 00:59:36,867 --> 00:59:38,934 The Press: Given that Republicans still control Congress, though, after 1256 00:59:38,934 --> 00:59:41,533 Election Day, isn't leaving this up to the legislative process -- 1257 00:59:41,533 --> 00:59:44,133 isn't that condemning LGBT people who have no federal -- 1258 00:59:44,133 --> 00:59:48,066 Mr. Carney: Many people say just that, even though it was in the prior 1259 00:59:48,066 --> 00:59:50,767 Congress, about repeal of "don't ask, don't tell." 1260 00:59:50,767 --> 00:59:54,100 And we believe that the country has moved dramatically on issues 1261 00:59:54,100 --> 01:00:01,967 like this, and that this President is committed to civil 1262 01:00:01,967 --> 01:00:06,600 rights and to building on the protections that are necessary 1263 01:00:06,600 --> 01:00:09,299 for LGBT people, as he is for all Americans. 1264 01:00:09,300 --> 01:00:10,066 The Press: One last question on this. 1265 01:00:10,066 --> 01:00:11,700 President Obama -- 1266 01:00:11,700 --> 01:00:14,399 Mr. Carney: I think you may have gotten all I can give. 1267 01:00:14,400 --> 01:00:17,633 The Press: President Obama in May said, when he endorsed marriage 1268 01:00:17,633 --> 01:00:20,033 equality, that he had spoken with servicemembers who were 1269 01:00:20,033 --> 01:00:22,066 discharged under "don't ask, don't tell," and he had spoken 1270 01:00:22,066 --> 01:00:24,834 with same-sex couples who were looking to marry. 1271 01:00:24,834 --> 01:00:26,799 Has he ever spoken to a victim of LGBT 1272 01:00:26,800 --> 01:00:28,400 workplace discrimination? 1273 01:00:28,400 --> 01:00:30,233 Mr. Carney: I don't know that he has or hasn't. 1274 01:00:30,233 --> 01:00:32,400 I just don't have a conversation to read out to you. 1275 01:00:32,400 --> 01:00:33,867 The Press: Can you get back to me on that? 1276 01:00:33,867 --> 01:00:37,433 Mr. Carney: I'm not going to ask him about every conversation he's had. 1277 01:00:37,433 --> 01:00:38,333 Donovan. 1278 01:00:38,333 --> 01:00:41,500 The Press: Jay, there are reports out of Syria that the rebels are making 1279 01:00:41,500 --> 01:00:44,867 advances, but part of those advances are being aided by 1280 01:00:44,867 --> 01:00:49,367 militias, some of which have suspected ties to al Qaeda. 1281 01:00:49,367 --> 01:00:54,266 What is the administration doing to make sure that those types of 1282 01:00:54,266 --> 01:00:58,867 groups do not take over or pose a danger to the U.S. 1283 01:00:58,867 --> 01:01:04,700 going forward, or even to the Syrian people? 1284 01:01:04,700 --> 01:01:07,066 Mr. Carney: Well, as you know, Donovan, it's long been our position 1285 01:01:07,066 --> 01:01:13,299 to work with our international partners to support the Syrian 1286 01:01:13,300 --> 01:01:15,567 opposition, and in supporting the Syrian opposition, to 1287 01:01:15,567 --> 01:01:19,033 support those groups that are committed to a more democratic 1288 01:01:19,033 --> 01:01:21,467 future for Syria. 1289 01:01:21,467 --> 01:01:25,900 And we are, of course, mindful of the fact that not all 1290 01:01:25,900 --> 01:01:30,600 elements of the opposition share those democratic aspirations or 1291 01:01:30,600 --> 01:01:36,567 share the kinds of universal values that we support and try 1292 01:01:36,567 --> 01:01:41,867 to advance in connection with the work that our partners do. 1293 01:01:41,867 --> 01:01:47,333 We are monitoring the situation in Syria very closely at many 1294 01:01:47,333 --> 01:01:50,934 levels, and we've talked recently yesterday about 1295 01:01:50,934 --> 01:01:52,233 disposition of chemical weapons. 1296 01:01:52,233 --> 01:01:54,567 We've talked about the fact that the opposition has made advances 1297 01:01:54,567 --> 01:01:57,433 and our concern that the Assad regime out of desperation would 1298 01:01:57,433 --> 01:02:03,433 make the extremely foolhardy decision to attempt to use 1299 01:02:03,433 --> 01:02:06,433 chemical weapons, and we have warned strongly against that. 1300 01:02:06,433 --> 01:02:09,967 We continue to work with our partners to support the 1301 01:02:09,967 --> 01:02:12,033 opposition and support those elements of the opposition that 1302 01:02:12,033 --> 01:02:15,299 we believe have Syria's and -- the best interest of Syria and 1303 01:02:15,300 --> 01:02:19,300 Syrians at heart, and who aspire to a more inclusive 1304 01:02:19,300 --> 01:02:20,734 and democratic country. 1305 01:02:20,734 --> 01:02:24,200 The Press: Is there any effort to encourage them not 1306 01:02:24,200 --> 01:02:26,332 to include al Qaeda in that? 1307 01:02:26,333 --> 01:02:28,600 Or how -- it seems like a -- 1308 01:02:28,600 --> 01:02:31,033 Mr. Carney: Oh, I think we're very clear in expressing our views about 1309 01:02:33,367 --> 01:02:37,734 who we believe has the best interests of the Syrian people 1310 01:02:37,734 --> 01:02:43,700 in mind and who -- when we talk about working with the 1311 01:02:43,700 --> 01:02:48,100 opposition, we work with members of the opposition and groups 1312 01:02:48,100 --> 01:02:53,100 within the opposition now as well as the Syrian opposition 1313 01:02:53,100 --> 01:03:01,033 group that has been formed that commit themselves to a brighter 1314 01:03:01,033 --> 01:03:03,667 and more democratic future for Syria and the Syrian people. 1315 01:03:03,667 --> 01:03:04,333 Thanks, guys.