Congress should let all of former president George W. Bush’s 2001 and 2003 tax cuts expire to cut the long-term budget deficit, former Federal Reserve chairman Alan Greenspan has said.
Mr Greenspan’s support helped persuade Congress to pass the tax cuts in 2001 and his comments thrust him into a heated political battle over whether to extend them beyond the end of 2010. “They should follow the law and let them lapse,” Mr Greenspan said in an interview.
“The problem is, unless we start to come to grips with this long-term [budget] outlook, we are going to have major problems. I think we misunderstand the momentum of this deficit going forward.”
The Bush cuts lowered income tax rates; created a new 10 per cent tax bracket; raised tax credits for children; and lowered taxes on dividends and capital gains. A “sunset” provision means that all the cuts will expire at the end of this year unless Congress extends them. Doing so would increase the federal budget deficit by cumulative $2,567bn between 2011 and 2020, according to the Joint Committee on Taxation.
The tax cuts were irresponsible and resulted in the doubling of our national debt. They did little to stimulate our economy and extending them would cause irreparable damage to our country, if we’re not past that point already.
DRUDGE RETORT 