Bush tax cuts
[1] The Bush tax cuts had sunset provisions that made them expire at the end of 2010, since otherwise they would fall under the Byrd Rule.
In 2012, during the fiscal cliff, Obama overcame the sunset provisions and made the tax cuts permanent for single people earning less than $400,000 per year and couples making less than $450,000 per year, but did not stop the sunset provisions from applying to higher incomes, under the American Taxpayer Relief Act of 2012.
[5] A report published by staff at conservative public policy think tank The Heritage Foundation claimed that the 2001 cuts alone would result in the complete elimination of the U.S. national debt by fiscal year 2010.
[11][12][13][14] Economist Paul Krugman wrote in 2007: "Supply side doctrine, which claimed without evidence that tax cuts would pay for themselves, never got any traction in the world of professional economic research, even among conservatives.
"[20] Critics state that the tax cuts, including those given to middle and lower income households, failed to spur growth.
[29] The New York Times stated in an editorial that the full Bush-era tax cuts were the single biggest contributor to the deficit over the past decade, reducing revenues by about $1.8 trillion between 2002 and 2009.
[31] CBO estimated in June 2012 that the Bush tax cuts (EGTRRA and JGTRRA) added about $1.6 trillion to the debt between 2001 and 2011, excluding interest.
[35] The non-partisan Pew Charitable Trusts estimated in May 2010 that extending some or all of the tax cuts would have the following impact under these scenarios: The non-partisan Congressional Research Service has estimated the 10-year revenue loss from extending the 2001 and 2003 tax cuts beyond 2010 at $2.9 trillion, with an additional $606 billion in debt service costs (interest), for a combined total of $3.5 trillion.
[37] In late July 2010, analysts at Deutsche Bank said letting the Bush tax cuts expire for those earning more than $250,000 would greatly slow economic recovery.
[38] Economist Mark Zandi predicted that making the Bush tax cuts permanent would be the second least stimulative of several policies considered.
The Slurpee Summit was a White House meeting between U.S. President Barack Obama and U.S. Congressional leaders[40] that occurred on November 30, 2010.
It was the first such meeting in the wake of the November midterm election in which Republicans took control of the House and gained six seats in the Democratic-controlled Senate.
[42] Obama apologized during the meeting for not making a greater effort to reach out to Republican lawmakers during his first two years in office,[43] and appointed Treasury Secretary Tim Geithner and Office of Management and Budget chief Jack Lew to help Republicans and Democrats hammer out an agreement on extending the Bush tax cuts.
[48] In particular, the framework included key points such as: Obama said, "I'm not willing to let working families across this country become collateral damage for political warfare here in Washington.
"[52] According to Kori Schulman (2010), Director of Online Engagement for the Whitehouse media team, the agreement has three accomplishments: “working families will not lose their tax cut, focused on high impact job creation measures, and does not worsen the medium-and-long-term deficit.”[53] Administration officials like Vice President Joe Biden then worked to convince wary Democratic members of Congress to accept the plan, notwithstanding a continuation of lower rates for the highest-income taxpayers.
[54] The compromise proved popular in public opinion polls, and allowed Obama to portray himself as a consensus-builder not beholden to the liberal wing of his party.
[55][56] It was also opposed by several leading potential candidates for the Republican nomination in the 2012 presidential election, including Mitt Romney,[55] typically on the grounds that it did not make the Bush tax cuts permanent and that it would overall increase the national deficit.
"[58] He argued strongly for maintaining the rates: "I do believe it's very important to send the signal to our entrepreneurs and our families that the government trusts them to spend their own money.
"[61] President Barack Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, on December 17, 2010.
In a report released in May 2012, the Congressional Budget Office (CBO) In addition to the government spending reductions and tax cuts, increases in costs from the Patient Protection and Affordable Care Act were slated to take effect, as well.
[64][65] The increase in tax rates that was due to occur had been described by Republicans including House Speaker John Boehner, House Majority Leader Eric Cantor and Senate Republican Leader Mitch McConnell as the largest in U.S. history, although the U.S. would be returning to Clinton-era tax rates.
In fact, the current laws that underlie CBO's baseline projections provide for significant changes of those kinds in coming years; many other approaches to constraining future deficits are possible as well.
