Summers backs extension of Bush tax cuts

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(CBS News) Another ally of President Obama on Wednesday came out against the president's position that tax rates on the wealthiest Americans should rise next year.

Lawrence Summers, who led the White House National Economic Council in early years of the Obama administration, said Congress should temporarily extend tax cuts set to expire at the end of the year.

"The real risk to this economy is on the side of slow down, certainly not on the side of overheating, and that means we've got to make sure that we don't take gasoline out of the tank at the end of this year," Summers said on MSNBC, "that's gotta be the top priority."

"We've got to make sure that we keep providing energy to the economy. In the areas where we have done that, like manufacturing, with the support for the automobile industry, we haven't had great results, but we have had much better results," Summers added.

The comments come less than 24 hours after former President Bill Clinton told CNBC that he also thinks the tax cuts that were a signature domestic achievement of President George W. Bush should be temporarily extended.

"What I think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what's necessary in the long-term debt reduction plan as soon as they can, which presumably will be after the election," Clinton told CNBC.

Asked whether that meant extending the tax cuts, Clinton said, "They will probably have to put everything off until early next year. That's probably the best thing to do right now."

Clinton later issued a statement through his spokesman walking back the comments.

"As President Clinton has said many times before, he supported extending all of the cuts in 2010 as part of the budget agreement, but does not believe the tax cuts for the wealthiest Americans should be extended again," spokesman Matt McKenna said in a prepared statement.

Republicans on Capitol Hill quickly seized on the comments from the two prominent Democrats.

"Extending all of the current tax rates for at least a year is really important if we're going to help job creators gain a little more confidence to put Americans back to work. Even Bill Clinton came out for it before he was against it. And then Larry Summers, the president's former economic advisor, this morning came out in favor of this," Boehner said.

Senate Majority Leader Mitch McConnell echoed Boehner's sentiment.

"Coupling ... Bill Clinton's remarks and then Larry Summer's remarks, it's pretty obvious that the economy needs the certainty of the extension of the current tax rates for at least a year," McConnell said.

Mr. Obama has repeatedly said he opposes extending all of the tax cuts again and argues the Americans making more than $250,000 per year should pay a higher rate in order to help bring down the deficit.

The fiscal cliff Mr. Clinton referenced is the simultaneous occurrence of the expiration of the tax cuts and automatic spending cuts that are also set to take place at the end of the year as a result of a 2010 compromise between the White House and congressional Republicans over the nation's legal borrowing limit.

Congress is expected to address those issues after the November 6 election when it becomes clear which political party has the upper hand in negotiations.

Additional reporting by CBS News Capitol Hill producer Jill Jackson.

[pinetreewest]

Donald Trump is not the only blovating ignoramus. It is to Obama's eternal shame he brought back the charlatan who help create the mess in the first place.

[nygurl1]

manny - I suggest you check your facts before you praise the hairpiece! Every time he went bankrupt ( I don't remember if it was 3 or 4 times), people got fired. Even on his show, more people get fired than win and I seem to remember that some of the winners got fired or quit.
You'd probably love him!
.
.
.What charlatan?

[wfw3536]

Boy Obama really knows how to pick them, first it is former President Clinton, now Summers. Obama's campaign is a mess.

[TimeToEvolve]

What do we expect from a greedy rich corporatist like Summers. I have no idea why he is any position of power, he might as well be a Republicon. Oh, that's right the corporations own the government.

[hsinco-2009]

These tax cuts for the top 1% MUST go.

If they are ended, the deficit will shrink to near $0.

[RealWorldNow]

you can't be serious... if you tax the rich at 100%, it's enough to fund the government for a couple weeks. The deficit is over 15 trillion.... really !!

[nygurl1]

Well it would be a start! Taking more taxes from the people who can afford it should make sense to any idiot!
And what was done in 9 years is not going to be fixed in four!

[RDriftwood]

After 11 years of tax cuts for the wealthy (the self proclaimed "job creators"), where are all the new jobs?

[retmw1]

I've been asking the same question.

[sjc_1]

Many people are wondering, the rich put their tax break money into hedge funds which invested in everything BUT America. If you make tax breaks for those that invest in America, that is what you get, if you just give them tax breaks, you never know where the money will go.

[RDriftwood]

Tax cuts for the wealthiest five percent of Americans cost the U.S. Treasury $11.6 million every hour, according to the National Priorities Project. Between 2001 and the current projected end of the Bush tax cut extension, tax cuts for the wealthiest 5 percent will cost the U.S. Treasury $1.184 trillion. If extended through 2021 as gop lawmakers propose, the total cost will exceed $3.2 trillion.

[nygurl1]

Reps don't need no facts! They just smoke their weed and nod their agreement to everything their masters say!

[john5673]

Many cooks; spoil the meal. Obama has similar dilemma in his financial department, he has appointed several economical advisers who were crossing each other and giving timely and untimely advises to Obama; including old President Bill Clinton, who behaved like his chief financial consultant.
In my opinion, Bush-Cheney and party has looted and wasted the American Treasury to that extent before leaving; there was no hope for any one to make it good again. Obama deserved credit for at least stopping the down fall and retain the name of America otherwise another Bush like (McCain) could have started another Iran war and America would have been a History.

[sjc_1]

Larry ought to just keep quiet. He is the one who told the head of the CFTC to be quiet about the sub prime bubble. If he had not interfered we might have had some oversight into what was going on and could have avoided a major disaster.

[val5000]

Ya, we should listen to Summers, the sleazy de-regulation advocate that did just such a great job advising that the president avoid any prosecution of the criminal banking cartel that stole over a trillion dollars from our economy so they could buy new yachts. This guys is a shill for the very richest. I'm middle-class, if the tax cuts expire my taxes will certainly go up. So be it.

[charleskaye]

Another sad example of misunderstanding our banking system, what people do with money and economics.

1 - The banks went under because of liberal "everyone should own a home" policies. Our gov told the banks "go ahead, loan to everyone. Tazpayers will bail you out."

2 - They "stole" the money? No, politicians GAVE it to them. But, exactly where did that money go? See #3

3 - "They bought new yachts"... By your logic, all those yacht makers would have had a great year in sales. Sounds like that money came back to us after all... If not yachts, then all the other things that companies made that those rascally wall street bankers bought would have made lots of money, profited, and allowed you to keep your job.

Drop the class warfare rhetoric. Close the dem playbook and please take courses in history, economics and finance. You need it.

[charleskaye]

It's ironic that the very people that chided Romney, regarding this tax issue, are now saying that it's the best thing to do right now. These same people also made a stink about how Bush's tax policies were hurting the economy, so what gives here? Are democrats admitting that conservative tax policies are the best solution? I think so. Why else would they come out in favor of continuing them?

As far as the "fiscal cliff", what exactly does that mean? If there are automatic cuts, to the tune of $1.2T, that will take effect, what is the bad part? Everyone knows the gov is spending beyond its means. So why worry about these automatic cuts. Sure, it cuts the amount of money the gov puts into the economy, but that's a short-term issue. In the long-term, we are better off.

My fear is that the short-term pain we need to deal with is more than many people will accept. This is horribly selfish. To add more debt, and not cut now, just pushes the debt can down the road to our kids. Are voters really so selfish that they would rather their kids have to deal with even more pain when that debt comes due?

Think about it. If today's parents can't make ends meet, and are borrowing to stay afloat, but decide to borrow even more, then pass that debt on to their kids, isn't that the most selfish and inconsiderate thing they could do? That's what our gov is doing.

Personally, I'd rather deal with a recession in the next year or so, rather than pass a DEPRESSION on to my kids. That's what this is really all about.