NYT editorial: Plenty of Work for the Lame Duck: The $4 Trillion Question

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Editorial

Plenty of Work for the Lame Duck: The $4 Trillion Question

The Bush-era tax cuts are set to expire at year end. That means the lame duck Congress has tough choices to make and not a lot of time to make them.

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The Republicans want to permanently extend all of the tax cuts, including those for the richest Americans. Before the midterm election, President Obama called for permanently extending the cuts for the 98 percent of households earning less than $250,000 a year, and letting most of the cuts expire for those who make more than that. Last week, he said he was open to negotiation.

What should happen? What would it mean to your tax bill? To the deficit?

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That is why we believe that for the sake of fiscal sanity any extensions of the Bush tax cuts must be temporary and focused on spurring consumer spending while the economy is weak. We support a one- or two-year extension of the cuts for low-, middle-, and upper-middle-income taxpayers, who spend most of their income.

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A one-year extension of the cuts for the lower 98 percent would add about $140 billion to the deficit, but the support to the economy is more important right now. Revenue from letting the high-end tax cuts expire — an estimated $40 billion in 2011 alone — could be used for job-creating measures in the near term and deficit reduction later on.

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Interesting.