Bill Clinton’s Bizarre Walk Back On Tax Cut Extensions
Bill Clinton walks back his comments about extending the Bush Tax Cuts in the most unbelievable manner possible.
Just a few days ago, Bill Clinton said in a CNBC interview that he believed that it would be prudent for President Obama to agree to a temporary extension of the Bush tax cuts in order to avoid the economic impact that many economists fear will hit the country at the end of this year. It is, as I noted, a fairly sound piece of advice given the fact that it seems unlikely that a deal on the tax cuts, the debt ceiling, the expiration of the Payroll Tax Cut, the expiration of extended unemployment benefits, and the expiration of the Medicare “Doc Fix” can be reached before Election Day or by a Lame Duck Congress after the election.
Despite the relative sanity of Clinton’s advice, though, it’s become the focus of a media firestorm. Republicans latched on to it in order to claim, incorrectly, that the former President had backed full extension of call the Bush Tax Cuts when, in reality, he had only backed a temporary extension to allow a deal to be made under less partisan circumstances. Democrats began to fret that Clinton was trying to undermine the Obama campaign, and some of Clinton’s own supporters were telling reporters that their boss was getting old and slipping up:
The genuine explanation, say people close to Clinton, is the same one that usually is the case: He was simply saying what he really thought, but in fuzzy, free-associating language almost guaranteed to produce controversy.
This was a habit that Clinton usually learned to control as president. But the circumstances now are much different.
Clinton, say associates, while mentally sharp, is older and a step off his political game, less attuned to the need for clarity and message-discipline during interviews.
“He’s 65 years old,” said one adviser, explaining how Clinton in a CNBC interview managed to say that the economy was in recession when it is not.
While I don’t interact with Clinton on a personal basis, I’ve got to say that strikes me as an absurd statement. 65 years old or not, Bill Clinton is still one of the sharpest political minds in the country. The idea that he doesn’t know what he’s saying is still, especially when you actually look at the transcript of the CNBC interview that started all of this:
PRES. BILL CLINTON: What I think they should do is find a way to keep the expansion going. And I think the- as weak as it is here, you know, unemployment in the euro zone I think is 11%. And- Germany’s doing well but the- and a lot of the smaller countries are doing extremely well, many of which are not in the euro.
But they’re trying to figure out a way to promote growth. And 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.
MARIA BARTIROMO: So does that mean extending the tax cuts?
PRES. BILL CLINTON: Well, I think what it means is they will have extend-they will probably have to put everything off until early next year. That’s probably the best thing to do right now. But the Republicans don’t want to do that unless he agrees to extend the tax cuts permanently, including for upper income people.
It seems pretty clear what Clinton was saying here. He was saying that, practically speaking, we’re unlikely to be able to reach a deal to extend the tax cuts, not to mention the other matters that will come up before December 31st. Since we’ve already heard from numerous economists, as well as the Congressional Budget Office, that allowing those events to happen all at once poses the significant risk of throwing the economy back into recession in 2013, Clinton says we need to try to avoid that. Clinton is also saying that growth should come first, and if that means putting off dealing with the fiscal tornado until later date, that’s what it means. The Obama (and Romney) campaign may not want to admit it, but Clinton was speaking the truth here and anyone in Washington who thinks that we can somehow deal with all these problems before the election, or in a Lame Duck Congress whose legitimacy may be severely undercut by the results of the election, not to mention a possibly Lame Duck President, is deluding themselves. In the end, the odds are that Congress will do exactly what President Clinton recommended on CNBC, which makes the criticism he faced for what he said utterly bizarre.
It’s also worth noting, incidentally, that Larry Summers, one of President Obama’s closest economic advisers at the start of his term before he went to Harvard, said exactly the same thing as President Clinton the other day.
Which brings us to yesterday and former President’s interview with Wolf Blizter on CNN where he comes up with what I can only say is the most bizarre and unbelievable walk back of a previous statement I have seen in a very long time:
(CNN) – Bill Clinton regrets the swirl over comments he made earlier in the week in which he appeared to suggest he would be open to extending the so-called Bush tax cuts for the wealthy, the former president said Thursday.
“I’m very sorry about what happened,” Clinton said in an interview to air on CNN’s “The Situation Room with Wolf Blitzer.” “I thought something had to be done on the ‘fiscal cliff’ before the election. Apparently nothing has to be done until the first of the year.”
The “fiscal cliff” consists of measures set to begin in January that would remove more than $500 billion out of the economy in 2013 alone. Those measures include the expiration of the Bush tax cuts and protection of the middle class from the Alternative Minimum Tax, the onset of $1 trillion in blunt spending cuts, and a reduction in Medicare doctors’ pay.
On Thursday, however, Clinton argued that he, in fact, supported President Barack Obama’s position, which calls for an end to the tax cuts only for those making $250,000 or more.
The former president emphasized he was mistaken about the timing of the fiscal cliff when he made his comments, thinking it would happen before the November election, rather than at the beginning of next year.
“I really was under the impression that they would have to do something before the election, and I was trying to figure out how they would kick it to last (through) the election,” he said.
He continued: “Once I realized that nothing had to be done until the first of the year, I supported (Obama’s) position. I supported extending them last year, but I think his position is the right one and necessary for working out a comprehensive (deficit reduction) deal.”
Wait? What’s this now? Bill Clinton, the most savvy political guru to occupy the Oval Office since at least Lyndon Baines Johnson, is saying he went into an interview with CNBC completely misinformed about the entire “fiscal cliff” issue? I don’t believe it, I don’t believe it for a second. The idea that Bill Clinton didn’t know exactly what he was talking about earlier this week is simply absurd. I guess what’s surprising to me is that, somehow, someone was able to get Bill Clinton to drink the Kool-Aid.
Anyway, here’s the tax cuts part of the interview: