Two more years of tax cuts and that’s it, says former budget director

Barely out of office as budget director, Peter Orszag has certainly found a new place -- off of the political reservation.

Orszag, who stepped down over the summer, takes a position slightly at odds with President Obama’s in an op-ed piece for Tuesday’s New York Times. Orszag argued that the United States faced two deficits: a short-term jobs deficit and a longer-term budget problem.

“In the face of the dueling deficits, the best approach is a compromise: Extend the tax cuts for two years and then end them altogether,” he wrote in the New York Times. “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. And that would still be worth it.”

The Bush tax cuts are set to expire at the end of the year, and that has become a political battleground for Democrats and Republicans in this midterm election cycle.

Conservative Republicans have called for extending the cuts for all income levels, while Obama and many Democrats want cuts for the top end eliminated. Obama would allow taxes to rise for individuals who earn more than $200,000 annually and couples earning more than $250,000.

White House spokesman Robert Gibbs told reporters that the administration’s position remained the same.

“I think if you’re making $250,000 or $400,000 or $600,000 or $800,000 in this economy,” Gibbs said, “there’s not a great crush on or pull-back in your consumer demand.

“This economy is not hurting people who make $800,000 a year. It’s hurting families that are making $40,000 a year.”

michael.muskal@latimes.com