The U.S. House took up a Senate-passed bill this week that would limit Bush-era tax cuts to the first $250,000 of income. With both the White House and Congress up for grabs in the November elections, the debate - and the eventual deal - has higher stakes than ever.
A recent report from the Joint Committee on Taxation claims that the Republican measure to preserve the tax cuts would cost about $80 billion more than the Democratic proposal to extend the taxes only for the middle-class, although both parties' proposals come with a price tag.
From The New York Times:
Robert Greenstein, president of the liberal Center on Budget and Policy Priorities, pointed to a report by the private equity giant Carlyle Group, which suggested that simply extending all the tax cuts and avoiding the automatic spending cuts in January could be more dangerous than letting the fiscal hammer fall. The "fiscal cliff" would lower the nation's indebtedness by $7.8 trillion over 10 years and bring the budget nearly to balance by 2016. In contrast, a last-minute deal to punt the deficit issue down the road would send a signal to world markets that the United States government is not willing to confront its red ink.
The Bush-era tax cuts, enacted in 2001 and 2003, are scheduled to expire on Dec. 31 of this year.
Kevin Hassett, a senior fellow at the American Enterprise Institute joins The Daily Circuit Monday to explain what voters need to understand about the effects of a potential extension or expiration of the Bush-era tax cuts. Chuck Marr of the Center on Budget and Policy Priorities, will also join the discussion.