Congress approved and President Obama signed legislation last week that will increase projected budget deficits by $858 billion. The additional borrowing would finance two-year extensions of the Bush tax cuts, a 13-month extension of unemployment benefits, and a one-year reduction in the Social Security payroll tax.
The administration negotiated the framework for the legislation with congressional Republicans, and some members of Obama's own party objected strenuously to certain parts of the deal – notably the renewal of tax cuts for high-income earners and a $5 million exclusion for the revived estate tax. But Obama said the bill as a whole would help the middle class and boost the economy.
Noting the high cost of the legislation, The Concord Coalition believes it should be followed as soon as possible by enactment of a substantial deficit-reduction plan –- including comprehensive tax reform and spending cuts -- that would take effect as the economy recovers.