CNN

April 13th, 2011

OMB Director talks to John King

CNN’s John King talks to Jacob Lew, director of the Office of Management and Budget about Obama’s fiscal speech. The full transcript of the interview is posted at CNN.com and a highlight is after the jump.

MANDATORY CREDIT: JOHN KING, USA

HIGHLIGHT FROM FULL INTERVIEW

THIS IS A RUSH FDCH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, HOST: And the president said today, and he was adamant about this, he said he would refuse to sign another extension of the Bush tax cuts.  As you know, a lot of people in Washington don’t find that to be a very credible threat or marker, promise, I don’t know what word you want to use for it, because he campaigned in 2008 on getting rid of the Bush tax cuts.  He promised last year to get rid of the Bush tax cuts and he signed an extension to the Bush tax cuts as part of the budget deal — tax cut deal you were just talking about.  Is this a final answer from the president of the United States never, never he would veto anything that includes an extension of those tax cuts?

JACOB LEW, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: I think the president was very clear today.  And I think if you look at December, December was a very particular point in time when we were just at the very beginning of a recovery and the risk of a tax increase in January was something that could have set us backwards.  It could have put us back into a recession.  We’re now talking about several years into a recovery and we’re not going to be in the same situation.

KING:  So Shermanesque never, never?

LEW:  I just said, the president was very clear today.

KING:  OK.  Another thing he said is that wealthy Americans need to pay more.  He was very clear about that.  And one of the things in addition to not extending the Bush tax cuts anymore, he said if you’re a wealthy American, we’re going to look at some of the deductions.  Maybe you’ll have big comprehensive tax reform and this conversation will go away, but under the current system, mortgage interest deduction was one of them.  At what point, at what level, how much do you have to make where then you would not get the mortgage interest deduction that you get today under the president’s approach?

LEW:  Well, the president didn’t put out the specific composition of a tax package.  He called for a tax reform debate to be undertaken —

KING:  Where does — where does he think that line should be though? That’s one of the — as you know, one of the criticisms is you laid out a vision.  What are the specifics?

LEW:  The president’s been clear that we don’t need to raise taxes for people at $250,000 and below.  There’s enough benefit to special tax provisions and lower rates in the higher brackets.  There are options that don’t require that.  That’s what he wants to work towards.

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