Obama Officials Won't Rule Out New Taxes

Two White House economic officials said Sunday that raising taxes on the middle class is still a possible option to shrink the federal deficit or pay for the proposed healthcare reform plan.

Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers said yesterday that they haven't ruled out a tax hike as one of the "hard choices" needed to fix the economy in the long run.

"It's never a good idea to absolutely rule things, rule things out, no matter what," Summers said.

Geithner echoed Summers's comment.

"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through healthcare reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."

It's the latest test for President Barack Obama, who has vowed not to increase taxes for most Americans.

During his presidential campaign, Obama repeatedly pledged taxes would stay the same or go down for 95 percent of Americans and told his supporters that "you will not see any of your taxes increase one single dime."

A report by the Department of Commerce's Bureau of Economic Analysis, released Friday, suggested that the recession appears to be slowing down. The economy dipped only slightly in the second quarter, falling at a 1 percent annual pace, which was better than expected, the report found.

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