In the fall of 2009, Obama’s chief congressional lobbyist, Phil Schiliro, touted a clever idea for dealing with the tax cuts: introduce a bill that would extend the middle-class cuts for two years while allowing the upper-income portions to expire. After two years, the middle-class cuts would also expire unless Congress paid for them with off-setting savings or tax increases.
Schiliro figured that, if the bill passed, the whole mess of tax cuts was likely to disappear when all was said and done, since there aren’t exactly trillions of dollars in easy-to-cut spending just lying around the federal budget, while raising other taxes was unlikely. And even if the bill didn’t pass, it would put Republicans on the defensive by shining a light on the huge budget costs of their most cherished accomplishment.
At first, Schiliro’s plan went nowhere—in truth it was as much a stunt as a serious proposal. But Schiliro had an important ally: Peter Orszag, the president’s budget director. Orszag was the administration’s most outspoken deficit hawk. He believed the only practical way to balance the budget was to repeal all the Bush tax cuts, not just the upper-income variety.