Former OMB director Peter Orszag's inaugural New York Times column, in which he expressed reluctant support for extending the Bush tax cuts for two years before ending them altogether, is still being rehashed by some liberal and conservative bloggers.
In an interview with the Washington Post's Greg Sargent today, Orszag clarified his position, saying it was not meant as a defense of tax cuts for the wealthy.
"The point I was trying to make is that we can't afford the tax cuts over the medium term, and they shouldn't be made permanent -- but the middle class tax cuts should not expire today... If the price to be paid for that a temporary extension of the upper income tax cuts, my view is that we should reluctantly accept that," Orszag told Sargent.
Liberal blogger John Cole at Balloon Juice responded to Orszag's statement, highlighting the fact that Orszag advocates a tax cut extension because he thinks they could be more effective politically, not policy-wise.
Orszag’s position in his piece yesterday was evident to anyone without an axe to grind or headline to sell- he thinks extending the tax cuts on the wealthy are a bad policy, but he would suck it up and accept it to keep the middle class cuts in place. The only way to read Orszag’s op-ed yesterday and come away with the coverage we got yesterday was to, well, ignore what he actually said in the op-ed and start salivating about conflict.
But I’m kind of used to that by now.
On the conservative side, NRO's Michael G. Franc didn't doubt that Orszag's motivation for supporting a temporary extension was political. He did, however, trip over a sentence from Orszag's original article in which Orszag explains why all tax cuts should eventually expire. He excerpts the following paragraph:
How much savings is plausible on the spending side? Medicare, Medicaid and Social Security will account for almost half of spending by 2015. Even if we reform Social Security, which we should, any plausible plan would phase in benefit changes to avoid harming current beneficiaries — and so would generate little savings over the next five years. The health reform act included substantial savings in Medicare and Medicaid, so there aren’t further big reductions available there in our time frame. (Emphasis added.)
Franc urged readers to "replay that last sentence again." He wrote:
So, a permanent, multi-hundred billion dollar tax increase hangs over every American taxpayer like the sword of Damocles precisely because President Obama and his allies in Congress used up all the potential savings from two of the big three entitlement programs — Medicare and Medicaid — to pay for Obamacare? The mere existence of Obamacare, we are now told, means all of us — included those with far less than $250,000 a year in income — will be saddled with higher taxes forevermore. And there is no other way to solve this fiscal mess? How convenient! Why didn’t Orszag and other administration officials in the know shout this rather salient fact from the rooftops prior to the final vote on Obamacare? Think it might have affected the outcome?
Guess we just have to score any future tax increase as yet another cost of Obamacare. Or, better yet, repeal the darn thing.