CBO Director Douglas Elmendorf told CNN: “[It would provide] a considerable boost to economic activity in 2011 and beyond for a few years.” This is precisely when the economy needs such a “considerable boost.” While it is true that the he then said, “Over time, [however,] the negative consequences of very high federal borrowing build up,” extending the tax cuts should be seen as a short-term thing; something that would be ended as soon as the economy has had a chance to recover (within a couple of years). This means helping stabilize the economy, while taking measures to address the longer-term deficit problems in the nation.
“Editorial: Extend the Bush tax cuts, temporarily.” Dallas Morning News. August 2, 2010: “So here’s our second-best answer: Congress should extend all the Bush tax cuts for 18 to 24 months, including those for the wealthiest taxpayers. During that period, lawmakers should do the hard work to craft a more comprehensive package of tax and spending reforms to put the budget on a sustainable course. And, yes, that includes paying for whatever tax cuts are made permanent.
This strategy acknowledges today’s situation and gives Congress time to act on changes that the president’s debt reduction panel has been chartered to present after the November elections. As Diane Lim Rogers of the deficit-fighting Concord Coalition writes, “A one- or two-year extension would buy time for the economy to further recover, while providing policymakers with a realistic deadline to permanently reform the tax system to raise adequate revenue in a more efficient and equitable manner.”