Liberals and deficit hawks won’t like it, but President Obama was correct to cut a deal with Republicans to temporarily extend all Bush-era tax cuts, including to the wealthy. Politically, the deal was needed to move on other important issues, such as unemployment benefits. A temporary extension also was needed to keep the economy recovering — just as stimulus spending was needed to stabilize the economy. Still, it’s striking that the deal came less than one week after Obama’s deficit reduction commission issued its report, and a little more than a month after GOP lawmakers regained the U.S. House on promises to reduce the debt. The tax cuts and other benefits are projected to cost about $900 billion over the next two years, financed entirely by adding to the national debt.
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