Editor’s Note: William Gale contributed to U.S. News & World Report’s Debate Club on the topic of the Senate tax plan. This plan would extend the Bush-era tax cuts only for those making under $250,000 and rejected one that would extended the cuts for all Americans. Democrats voted 51-48 in support of extending the cuts, which will expire at the end of the year, only to middle- and low-income Americans. Republicans opposed the Democrats’ plan on the grounds that it raises taxes.
As the U.S. economy continues to putter slowly along, policy makers need to provide ways to boost aggregate spending and accelerate the economic expansion back to full employment. At the same time, the looming budget shortfalls in the medium- and longer-term will require significant changes to both spending and tax programs.