A permanent extension of the tax cuts enacted under George W. Bush would boost growth in the short term but add over $3200 billion to the US budget deficit in the next decade, the Congressional Budget Office estimated, as it issued its latest warning on the US fiscal outlook.
The administration and many Democrats have proposed extending the tax cuts for Americans earning up to $250000 a year, but not for wealthier individuals, partly on the grounds that it would help shrink the deficit. The issue is emerging as one of the biggest flashpoints for November’s midterm elections.