Obama’s OMB Director: Extend Bush Tax Cuts

In his debut article as a columnist for The New York Times, Peter Orszag is urging a two year extension of the Bush tax cuts. Orszag was the Obama administration’s OMB Director until the end of July, and he previously was Speaker Pelosi’s Director of the Congressional Budget Office.
His comments are certain to be viewed as a partial vindication of the Bush’s administration’s economic policies, and they are likely to be quoted by GOP candidates throughout the nation. Paul Begala, a former senior aide during the Clinton administration, has said it will be “hard to now claim GOP economic policies were bad if Democrats continue them. That is a mixed message.”House Majority Steny Hoyer (D-MD) has already said Congress will act in mid-September to extend the Bush middle class tax cuts.
Orszag wrote: “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. Why does this combination make sense? The answer is that over the medium term, the tax cuts are simply not affordable. Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.”
In a related development, Chicago Mayor Richard Daley says “This is a much more difficult economy than we have ever seen. This economy is not going to change tomorrow. I wish it was, but it will not change.” Daley said that increasing taxes was not the solution. “If anybody believes they can increase taxes today, I think they’re out of their mind.”

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