(CNN) - Former White House Budget Director Peter Orszag is breaking with President Obama on the controversial election-year issue of whether the Bush tax cuts for the wealthy should be scrapped, declaring in a New York Times op-ed that failing to extend the tax cuts for the rich would "make an already stagnating jobs market worse over the next year or two."
To be sure, the crux of Orszag's argument is not complete music to the ears of Republicans because he's proposing a compromise by which all of the Bush tax cuts are extended for two years but then will be ended altogether, something the GOP does not want to endorse.
CNNMoney.com: Orszag: Extend Bush tax cuts for 2 years
But the more sensational part of Orszag's first column for the New York Times is that he is urging the president he worked for just a month ago to sign on to allow the tax cuts for the wealthy to continue in the short-term, borrowing a line of reasoning Republicans are using on the campaign trail.
"Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt," Orszag writes in the new occasional column he will write for the New York Times. "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."
White House aides were quick to make clear that Orzsag's advice will not change the president's view that the tax cuts for the rich need to expire at the end of the year in the name of fiscal discipline.
"The president has been clear about his support for extending tax cuts for the middle class and about ending the tax cuts for the wealthiest 2 percent of Americans, which would cost $700 billion over ten years to extend at a time when we are dealing with a fiscal crisis and the independent (Congressional Budget Office) has listed as the least effective form of growing the economy," White House spokeswoman Amy Brundage told CNN.
Yes! extend the tax cuts 2 more years...we earned the money, we should be allowed to keep it.
This is genius in action. First, the Bush tax cuts created no jobs to begin with so to continue them is meaningless. Secondly, the government needs the money. This country is in debt. If only Obama hadn't squandered the fantastic economic situation Bush left him. If tax cuts create jobs, let's do away with all taxes and there would be full employment!!!!
What do you expect, Peter took a huge Wall Street pay cut to pad his resume' by working in the White House and he is about to go back to being among the over paid cooperate exc, he is just revealing his true colors.
A lot of talk about the Bush tax cut and the extension of the Bush tax cuts. No one has said how many American got the tax cut. If you didn't make $250,000 you didn't get tha Bush tax cut .Now President Obama, in keeping with a campaign pledge, wants to raise taxes on families making more than $250,000 but keep them where they are for everyone else. Have anyone asked how much money or taxes the government lost because of the Bush tax cut on the top 3-5 % of american or who ever got the tax cut.
This is an issue that is a joke!
Show me one issue where cutting a wealthy persons taxes has helped the economy. I know several people with money- not one has done anything different during the past 10 years when it came to spending . they take the extra money and put it in the stock pile.
They don't open businesses, they don't travel more- they just live their lives the same with more money.
I'm waiitng... Show me the spending
And why is he the Former White House Budget Director?
I almost don't care anymore. Give em their tax cuts..why not just give them the keys to the country and be done with it. They are the entitled, not the poor slobs who lost their jobs and now have to deal with trying to find a job that will pay more than unemployment, but not enough to pay for the roof over their head, their children's college, putting food on the table. They are the entitled, who's children won't have to go fight in their 2 wars. They don't need to pay for 2 wars that they supported. Who cares. Let's cut all entitlement spending to the bone, and that includes Medicare and SS. Lord knows I could use that money they take out of my check every payday to invest in the stock market or help pay for my childs education. I'm tired of working my self to death so that these senior citizens getting free bus rides to DC (while enjoying their medicare and SS) to protest against this sitting President and congress's deficit spending ( entitlement spending ) while I'm one of the working slobs helping them do this...So cut it all.
I guarantee you that no rich person has EVER said, "Oh, wow, an extra $4 million. Man, I should go out and hire some people now." Why? Because personal wealth does not ensure jobs, nor does corporate wealth, as corporate wealth now days only means the CEO - a rich person - will get more personal wealth.
i knew i didn;t like ( or trust ) this guy for some reason..Looks like he may have been a closet GOP'er !!!!!
Since the bush tax cuts were never paid for, we are stealing from our children to give money to the very wealthy. According to the CBO, this has the least stimulative effect on the economy of all the proposed fixes. These tax cuts need to end.
If we are to steal from our children to fix our economy now, lets at least leave them something to show for it, as FDR did in the '30s, like the Hoover dam, Red Rocks amphitheatre, the TVA, and any of numerous projects we still enjoy to this day.
Let's either suck it up and end the deficit based transfer of wealth to the top 2%, or spend this money we don't have on effective stimulus programs.
Twice we have tried "trickle down." Funny how, under Reagan's trickle down (or urinate down), unemployment was at 10% in the mid 80s, and under bush's urinate down, unemployment reached 10% in 2009. Get it? Urinate down is nothing more than peeing on the middle and lower income earners.
Wow, this guy will get skewered by the liberals on this site. Can't wait for those heads to explode again.
This guy is real intelligent, but the tax subsidies for the very wealthy 2% of Americans (from 39% to 35%) should end.
The people who make (declare to IRS) over $250K are celebrities and CEOs, not small business people as the Repubs want you to think.
The small business people I know are smart enough to declare much less than $250K.
It's just another Repub scam to help out their corporate sponsors and fellow lobyists.
Ask yourself – when the Repubs were in power for so long in every branch of government why didn't they make these tax subsidies permanent?
You won't find the answer watching Foxed up TV.
Did the authors of this even read his op-ed this morning? It says "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."
Seriously – this is unacceptable reporting.
You are kidding. With Corporations taking huge profits rather than re-investing in either workers, improvements or R & D while shareholders and CEOs are raking in the bucks ... you have got to be kidding. The ultra-rich have shown for 40 years that they do not 'grow' the economy! They abuse it! The Market should not Rule. The Market should Serve. Around the world with this type of Free Market, we have created another aristocracy with everyone else serving them. Shame on the Conservatives and Republicans and any economist who believes the aggregation of wealth is good for an economy.
Sorry, Pete. No matter how you try to spin it, extending the tax cuts for the richest 2% of America is just another nail in the coffin of the middle class.
Orzsag's argument missed the crux of the matter in that the wealthy do not account for the consumer spending that creates the demand needed to re-energize business. The other issue is that businesses are currently hoarding cash. They the most cash heavy they have been in years. The argument that they need this tax cut to hire employees is bunk. They have the cash to do it now if they wanted. The problem is demand. No business is going to create inventory that they have no orders for. Joe and Jane main street are unloading debt and are not inclined to engage in heavy consumer spending right now. Until they have de-leveraged more don't expect consumer spending to recover. Better to expire the tax cuts and deal with some of the government debt.
If he was still working for obama he would state the party line that the tax cuts did not and would not work. I guess he got tired of toting the water for this clueless occupant of the Oval Office.
Who cares what Orszag thinks? He's a Wall Street hack!
More tax cuts with borrowed money.
if we are going to keep adding to the amount of money we borrow, lets use it to rebuild America's infrastructure rather than giving it to the rich to squander.
And the Bush Tax cuts, FYI: THEY ARE HISTORY. Bush and his cohorts wrote them to expire, they will expire. If the current Congress and President put in tax cuts, they are not the Bush tax cuts, they are the Obama tax cuts (which we can't afford!).
Bush and his cohorts could have written the tax cuts to be permanent, if they thought they could have passed such a bill, but THEY DIDN'T. There were a few reasons; one was that such a bill would have added enormously to the projected debt. That is still a good reason why we should go back to reasonable tax rates, such as those in place during the growth years of Bill Clinton (growth AND budget surpluses, whatta genius!). And loose some of those giveaways that keep half of the country from paying ANY taxes.
It is time for Orszag to find another job!
We all better hope this tax cut is extended and maybe another tax cut for the rich or they may ship all our jobs to communist china.
More proof that obama is a Total Failure and Geitner doesn't know
a twit about the economy!
yep, the rich need more tax cuts!
hey, THAT"S ME.....
Do you ever wonder if the more fortunate of us can put a little back on the table... i'm fine with doing my part....as long as you can figure out ways to spend it wisely....i.e NOT on wars!
Do not extend the Bush tax cuts because greed does not produce jobs.
People do not understand........ the Bush Tax Cuts.
Bush Tax Cuts are FOR the wealthiest........ 1%.......... people who earn OVER........... $250,000 a year. IT IS FACT, that these folks DO NOT SPENND their extra money.
IF the Bush Tax Cuts had ......worked......... would we be in this mess?
Remember, America, the financial meltdown of 2008? The 8% UNemployment in ......2008? Trickle down economics ........never worked!