This would have been a great time for Democrats and Republicans to come together and forge a "budget neutral" compromise of spending cuts to offset lower tax revenues. For two years we have been living under “emergency” exemptions from the PAYGO law. I think the voters showed they are equally concerned about the jobs and the deficit issues. It is about time we get a pledge from Congress to stop using “emergency” exemptions from the PAYGO rules. Extending the Bush tax cuts and unemployment benefits are issues with enough political leverage to force legislators to make hard compromises on spending cuts. There is probably the easiest political opportunity our legislators will find to cut spending.
I’m puzzled on both counts. Let me get the personal stuff out of the way: I think this is a terrible deal. I was rooting for gridlock to cause the tax cuts to expire entirely, which would probably have a moderately negative impact on the economy, but would at least somewhat forestall a devastating fiscal crisis down the road. If it was politically necessary to do tax cuts, I wanted them to be as small as possible, not $900 billion over two years.