White House Won't Rule Out Tax Hike

At the regular briefing for White House reporters on December 8, I asked Snow whether he was ruling out a tax increase. “I’m not ruling it up, and I’m not ruling it down,” Snow said, “because you know that, as you and I have seen in the past, definitions of these things can be very squirrelly.”

Citing reports that Treasury Secretary Henry Paulson has not closed the door on raising taxes as part of a deal with congressional Democrats to reform Social Security, I had initially asked Snow if President Bush would rule out raising taxes, including lifting the cap on the income subject to payroll taxes or lifting the marginal income tax rates.

Un-Squirreling It

At first, Snow did not give a direct answer. “What the President believes in, and he’s talked about it before, the President believes in cutting taxes,” he said. “He also believes in addressing the long-term problems we face with entitlements, both Medicare and Social Security. Having not been party to Secretary Paulson’s discussions, I’m not going to be in any position to characterize what’s going on. But I think you know as well as I do that the President is a tax-cutter and he also wants to address Social Security, and he believes that we ought to be able to have market incentives in there so that future generations are going to be able to take advantage—“

At this point, I followed up: “So you are ruling out a tax increase? Or you’re not?”

“No, I’m not,” said Snow. “I’m not commenting either way. I’m not ruling it up and I’m not ruling it down, because you know that, as you and I have seen in the past, definitions of these things can be very, very squirrelly. And I would just rather not get locked into a debate about it. Let’s wait and see what happens.”

Almost as an afterthought, Snow added: “You know the President’s record when it comes to taxes, and he’s a tax-cutter.”

Four days later, I made another attempt to get Snow to rule out a tax increase. After an hour-long briefing in which almost all of the questions focused on Iraq, Snow called on me and I recalled the previous session in which he said there were “squirrelly” ways of defining a tax increase.

“Could we ‘un-squirrel’ it?” I asked. “Does the administration rule out lifting the income cap on payroll taxes?”

“John, I am not in a position to talk about what—when we are ready to announce a policy on Social Security, I will be happy to do it,” he said. “This also falls into the internal deliberation rule, which is, many things are discussed, many are offered, few are chosen. The President will announce which policies are chosen.”

Snow’s answers on both occasions are light years removed from Bush’s own statement on a tax increase five years ago. On Jan. 5, 2002, at an event in California, Bush pointed out that the Democrats wanted to raise taxes, but that he would stop them. “Not over my dead body will they raise your taxes,” he said.

But on Feb. 16, 2005, as Bush was making his pitch to reform Social Security, the New Haven (Conn.) Register reported that he told a group of regional newspaper editors that he would not rule out increasing the amount of income subject to payroll taxes as part of a reform deal. At the time, Bush tried to distinguish between raising the payroll tax “rate” and raising the amount of income the tax is levied against. “The one thing I’m not open-minded about is raising the payroll tax rate. And all the other issues go on the table,” Bush said at the time.

Based on Tony Snow’s recent words, a potential tax hike may be on the table in Bush’s final two years in office.


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