Larry Summers: Tax Increases Possible

On 'Face the Nation' Sunday President Obama's chief economic advisor said that future tax increases are a possibility, but also that Mr. Obama won't pursue policies that burden the middle class.

Bob Schieffer asked National Economic Council Director Lawrence Summers if taxes could be raised for middle-income Americans.

"There is a lot that can happen over time," Summers said. "It is never a good idea to absolutely rule things out no matter what."

He added that President Obama is aware of the effects of his policies on middle class Americans.

"What the president has been completely clear on is that he is not going to pursue any of his priorities - not health care, not energy, nothing - in ways that are primarily burdening middle-class families. That is something that is not going to happen."

Asked if the numbers of jobless in the country could rise further, Summers said, "It's going to take a while" to see increases in the numbers of the employed.

"The number of jobs probably has not yet bottomed out because experience suggests that it lags" as recessions end. "But we're certainly much closer to the point where it bottoms out than we were, and the crucial, necessary condition for getting jobs growing and expectations that output will grow."

"The recession. Is it over?" Schieffer asked.

"Most forecasters are now looking at growth and output in the GDP over the second half of this year ... They're looking for it because they see that inventories are way down and businesses are going to build them up; because they see some increase in car and housing, sales; because they know that the Recovery Act is going to gain force.

"The economy is not going to be back to normal for quite some time. Our problems weren't made in a month or a year and they're not going to be fixed in a month or a year," he said.

For more on "Face the Nation" (08.02.09):
• Video of roundtable discussion with Bob Woodward, David Brooks and Kathleen Parker
• Schieffer: You Know You're a Senior Citizen If . . .
• Complete Transcript (pdf)