Orszag: Fix Our Nasty Twin Deficit Problem

America must deal with twin deficit problems—a jobs deficit now and a massive budget deficit in the future, writes Peter Orszag, former director of the Office of Management and Budget, in his first column for The New York Times. Dealing with the Bush tax cuts will help manage both, he argues. The tax cuts should be extended for two years—though it would be best just to extend the middle-class cuts, Congress seems unlikely to pass them without keeping cuts for wealthier people. Such a move would prevent a worsening of the already bad jobs market, and avoid creating an absolutely unsustainable budget deficit later. Making all the Bush tax cuts permanent would balloon the deficit by $3 trillion over the next 10 years. But it would be irresponsible to make even the middle-class tax cuts permanent, Orszag writes. The budget problem can’t be solved without cutting spending and boosting revenue. A policy of extending the Bush tax cuts for just two years has another beautiful perk: Canceling them doesn’t require an affirmative vote. Perpetual congressional deadlock works in its favor.