With the U.S. economy spinning its wheels, demands are growing for President Obama to “do something.”  But considering the nature of the slump and the political dynamics in Washington, there may be very little he can do to get the economy out of the ditch. Obama doesn’t make his life any easier when he makes [...]

Congress headed off for its summer vacation yesterday, exhausted after the protracted wrangling over the debt limit that ended with a whimper when President Obama signed the bill that lets the government continue to pay its bills. Few people were happy with the result—the best you can say for it is that we won’t have [...]

A major goal of last December’s Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 (aka extending the Bush-era tax cuts) was to boost the economy by avoiding scheduled tax increases and, at the same time, adopting a few new tax cuts. Both steps, supporters claimed, would put more money in people’s pockets [...]

When the President signs the big tax deal later today, will he be cutting income taxes for most families or sparing them a tax hike? Will he be slashing the estate tax or resurrecting it? Those questions have a clear answer in the official budget world: the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation [...]

A modest thought experiment: Here is a check for $858 billion. Your job is to boost short-term economic growth. What would you do with the money? President Obama and a huge bipartisan majority of the Senate have given us their answer (and the House is likely to add its support tonight or tomorrow): They’d extend [...]

Ever since the 2008 presidential campaign, President Obama has argued passionately for extending the Bush-era tax cuts for all but the richest 2 percent of Americans. His reasoning: the rich have fared spectacularly well over the past quarter century—incomes of the top 1 percent tripled in real terms—while incomes grew slowly or not at all [...]

As usual in December, personal finance columns are filled with end-of-year tax advice—all those things you should do before New Year’s to cut your tax bill. But 2010’s end-of-year issues are different: This year, it’s Congress and the president who need to act fast on a long list of tax policies. Everyone knows about the [...]

It is a good thing the “Creating American Jobs and Ending Offshoring Act,” which died in the Senate today, was never supposed to pass. That’s because it would have neither created American jobs nor ended offshoring (a word that never should have become a verb). The bill, sponsored by Senate Democrats, had three parts: It would [...]

While Washington seems obsessed with the fate of the Bush tax cuts, it has paid little attention to a soon-to-expire Obama tax cut: the Making Work Pay credit (MWP). Like the 2001 and 2003 tax cuts, this credit, which was enacted as part of the 2009 stimulus, is also scheduled to expire at the end of this year. President Obama has proposed extending it through 2011. But Congress has been largely silent about what it plans to do, in part because extending the credit for another year would reduce federal revenues by more than $60 billion

The Congressional Budget Office’s annual mid-session update provides some striking evidence of just how challenging today’s fiscal environment is. Because deficits were so high going into the economic slump, and because the financial crash was so steep, Washington must now navigate between two unacceptable outcomes: tight fiscal policy and slower growth now, or bigger deficits and slower growth later.