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Axelrod Denies Cave-In on Bush Tax Cuts

Last night, Howard Fineman and Sam Stein reported that David Axelrod, White House advisor, acknowledged that the President would most likely sign an extension of the Bush tax cuts for all rates, including those over $250,000 a year. The only turf that the White House would continue to protect is whether to make those tax rates permanent, or just extend them for a prescribed period.

That appears to be the only way, said David Axelrod, that middle-class taxpayers can keep their tax cuts, given the legislative and political realities facing Obama in the aftermath of last week’s electoral defeat.

“We have to deal with the world as we find it,” Axelrod said during an unusually candid and reflective 90-minute interview in his office, steps away from the Oval Office. “The world of what it takes to get this done.”

“There are concerns,” he added, that Congress will continue to kick the can down the road in the future by passing temporary extensions for the wealthy time and time again. “But I don’t want to trade away security for the middle class in order to make that point.”

This seemed pretty straightforward, but Axelrod has come back today and denied the characterization. He told the Washington Post’s Greg Sargent that he “simply re-stated” what the President and Robert Gibbs have been saying, that they want to extend the tax cuts for the middle class, and that tax cuts for the rich cannot be made permanent. Dan Pfeiffer, communications director at the White House, added:

The story is overwritten. Nothing has changed from what the President said last week. We believe we need to extend the middle class tax cuts, we cannot afford to borrow 700 billion to pay for extending the tax cuts for the wealthiest Americans, and we are open to compromise and are looking forward to talking to the Congressional leadership next week to discuss how to move forward. Full Stop, period, end of sentence.

Axelrod also appealed to the National Journal, denying the Huffington Post story. Needless to say, the Republicans ignored these entreaties.

Minority Leader and upcoming Speaker John Boehner was, unsurprisingly, pleased by the news. His press secretary, Michael Steel, was quick to react to the story Thursday morning.

“Republicans made a pledge to America to permanently stop all of the tax hikes scheduled for January 1,” Steel said. “We’re glad to see that the President’s most trusted advisor now agrees with this course of action, and hope he and the President will show leadership by convincing Speaker Pelosi to stop these tax hikes permanently in the upcoming lame duck session.”

This has been a frustrating game played by this White House, more so than others. They keep launching trial balloons or saying things that get misconstrued or what have you, only to vehemently deny said trial balloon or misstatement the next day. The track record on whether the original statement was the actual course of action is mixed and often dependent on the ferocity of the response. So there’s no way of knowing the truth here.

All I’ll say is this – the tax cuts are going to get extended, I think that much is clear, because Republicans are not going to compromise on them, and even though Democrats had a winning hand to play, they won’t back it up. The other thing is that this government-by-trial-balloon is pretty debilitating to the White House’s credibility. If each day, their message becomes “we didn’t say that,” it reinforces the idea that you can’t believe what they say. They may think it’s clever to signal their positions or message-test through the media, but it’s actually pretty hurtful to their brand.

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David Dayen

David Dayen