July 7 (Bloomberg) -- A significant postponement of spending cuts and tax-cut expirations set to kick in Jan. 1 would be a “disaster” for U.S. fiscal credibility and for President Barack Obama’s ability to govern if he is re-elected, said John Podesta, a former White House chief of staff to President Bill Clinton.
“I would definitely not go for a long-term extension” such as a nine-month deal, if congressional Republicans push for that, said Podesta, an Obama supporter and chairman of the Center for American Progress research center in Washington. Podesta was interviewed on Bloomberg Television’s “Political Capital With Al Hunt,” airing this weekend.
Republican and Democratic congressional leaders are weighing whether and how long to delay $1.2 trillion in automatic spending cuts over a decade that would be triggered if Congress fails to reach a deficit-cutting agreement.
While “skeptical” of the administration’s ability to get a broad bipartisan fiscal restructuring deal mixing spending cuts and tax increases in the lame-duck session of Congress after the Nov. 6 elections, Podesta said Democrats should use the year-end deadline to push for a framework agreement.
Podesta said Obama has “got to be concerned” about a “sideways” jobs report the government issued yesterday that shows the nation’s unemployment rate stalled at 8.2 percent four months before the election.
“I don’t think it’s a disaster, either,” Podesta said. “The recovery is still intact,” and “we’re still putting jobs on the board,” including in the manufacturing sector, he said.
Podesta said the U.S. Supreme Court ruling last week upholding the health-care coverage mandate in the Patient Protection and Affordable Care Act so far has been more damaging for Republican presidential candidate Mitt Romney than for Obama, who championed the law.
Chief Justice John Roberts’s justification of the mandate as a tax opens Obama to criticism he is raising taxes on middle-class Americans who don’t purchase insurance. Romney, who is accusing Obama of raising taxes, enacted a similar mandate as governor of Massachusetts and has vacillated between describing it as a penalty and a tax.
That has made Romney “look like a flip-flopper once again,” Podesta said. “We’re pulling up videotape in which he said both things.”
Podesta said Romney also is facing growing scrutiny of the “incredibly complex set of financial transactions” through which he and the Boston-based Bain Capital LLC that he co-founded made money, including offshore accounts in the Cayman Islands.
Podesta said Romney has been “stonewalling” legitimate calls for more transparency on these issues.
“At the end of the day, you know, how he got an IRA that’s valued at $102 million, when the limits on how much you can put in was $30,000 a year, people are going to want some answers to this,” Podesta said.
“The American public is going to kind of scratch their head and say, how did he make all that money?” Podesta said. “Where is it? Why is it in all these foreign offshore accounts? Is he avoiding taxes? Why is his tax rate so low?”
Podesta added that the question for voters is, “Is he going to be looking out for me?”
Romney in January disclosed that he and his wife, Ann, paid a 13.9 percent tax rate on 2010 income of $21.6 million, using the preferential rate for capital gains and charitable deductions. The top rate for ordinary income is 35 percent.
Romney spokeswoman Andrea Saul dismissed Podesta’s criticism, calling Obama and his allies “desperate to distract” from yesterday’s government report showing slower-than-forecast growth in U.S. payrolls last month.
“Since President Obama can’t run on his abysmal economic record, he and his allies have resorted to false and ridiculous attacks,” Saul said in an e-mailed response to a request for comment.
Romney, in a Time magazine interview in May, defended his record at Bain and said voters care more about Obama’s record in office than his own background at Bain.
“Has the president made things better for the American people?” Romney said voters will ask. “Are they better off than they were four years ago?”
On taxes, Romney told Time he’s looking to provide a lower rate “across the board for Americans” to boost small businesses.
Asked whom Romney would choose his vice presidential running mate, Podesta predicted Representative Paul Ryan, a Wisconsin Republican and chairman of the House Budget Committee. Ryan favors repealing Obama’s health law, overhauling Medicare and providing refundable tax credits for buying health insurance.
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