Former budget director Peter Orszag thinks the Bush tax cuts should be extended for two more years. I think he should pound sand.
Here's an excerpt (PDF) from President Obama's campaign literature in 2007-2008:
Restore Fiscal Discipline to Washington
Reverse Bush Tax Cuts for the Wealthy: Obama will protect tax cuts for poor and middle class families, but he will reverse most of the Bush tax cuts for the wealthiest taxpayers.
Nowhere in that literature does it say anything about extending tax cuts because Republicans aren't playing nice and are sticking their back ends in the President's face. Nowhere. Up till now, Obama has kept the majority of his campaign promises, even if they do not look exactly like we thought they should.
So along comes Peter Orszag, former White House budget director, with this little bomb:
In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.
Not so much. This is the difference between how an accountant looks at things and how people look at them. I would gladly give up whatever piece of tax cuts would be coming to me to see the wealthy folks taxed at a reasonable rate.
Orszag can come up with all the reasonable arguments that accountants and economists make routinely, but nothing will change the fact that there was a promise made in 2007-2008. We all know Republicans won't make a whit of difference in the end anyway, since they have made it clear they won't play on any field at any time no matter how much is extended their way.
Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt. And since financial markets don’t seem at the moment to view the budget deficit as a problem — take a look at the remarkably low 10-year Treasury bond yield — there is little reason not to extend the tax cuts temporarily.
Yes, there's a real big reason not to; namely, it would be a broken promise that would appear to me to be nothing more than giving into the schoolyard bullies. Perhaps we could hand over our lunch money, too, and while we're at it, would we also like to let them raise the Social Security retirement age to 75 and let oil companies sit at the right hand of the President?
This is not a cut-and-dried issue. This is emotional. From my perspective, what the Bush tax cuts got me was no economic growth for the last decade and multiple threats to my future security. I see absolutely no reason to budge on this. None.
Fortunately, Mr. Orszag is no longer the White House budget director. I hope that means he and the President don't see eye to eye on this particular question and he's looking for a pickup by one of those rich dudes who don't pay much in taxes.