Republicans have been saying they want a second round of tax cuts next year. Now they have an excuse to push it hard, which ensures a lengthy, emotional debate in an important election year that will see a third of Senate seats and all of the House up for grabs.
But Clinton, after musing about the feasibility of a tax cut to The New York Times on Thursday, said on Friday he didn't really mean it.
Asked at a press conference if he is really thinking of a tax cut next year, Clinton insisted he had been misinterpreted by The Times. "I don't believe that's a fair interpretation of what I said yesterday," he insisted.
He explained he meant that people who are talking about a tax cut (Republicans) are assuming there will be a budget surplus. "There is not a surplus," Clinton said. "We don't want to spend money we don't yet have."
The White House takes credit for getting the annual deficit down from $300 billion to about $23 billion but some think it will start to go up again as Medicare costs rise. Friday Clinton appointed five members to a bipartisan commission that is going to look into ways to pay for the soaring increase in Medicare and Medicaid benefits as the population ages.
Yet it's no secret that the Clinton team has been strategizing about how to counter the GOP call for tax reform, tax simplification and tax cuts next year. Economic aides have confirmed that Clinton has been looking at easing the so-called marriage penalty, which means that two-worker couples get hit harder than one-earner families. Clinton got pushed by Republicans and public excitement into endorsing changes at the IRS earlier this year after he initially balked.
Thursday he told The Times that a tax cut would have to be fair to middle class taxpayers, a boon to the economy and simplify the tax code. Friday he said he didn't mean he is committed to a tax cut.
But aides to House Speaker Newt Gingrich and Senate GOP leader Trent Lott said they were pleased because they have been talking for some time about another tax cut next year. Others said that politically, it could be difficult for Clinton to oppose the idea of tax cuts now although he might object to the specifics of a GOP plan.
Republicans say they'll announce details early next year. Some Republicans want a flat tax, but others want a national sales tax. White House aides said neither of those ideas would be acceptable to the president. But The Times quoted Clinton as saying, "I wouldn't rule out the fact that I might find something that I think would work."
(Ann McFeatters covers the White House for Scripps Howard News Service.)