PETER ORSZAG: 'We're Going To End Up Regretting' What We Did With Taxes In The Fiscal Cliff Deal

Business Insider

Everyone is talking budgets again.

Earlier this week, Paul Ryan introduced his plan to balance the budget in 10 years.

Then yesterday the Democrats unveiled a budget that includes stimulus, tax hike, and some long-term deficit reduction

So we were fortunate to have Peter Orszag -- Obama's former Office of Management and Budget director and now a VP at Citi -- in for an interview at Business Insider to talk budgets.

We'll publish the full interview in the coming weeks, but one interesting part concerns his discussion of the Fiscal Cliff deal, which saw income taxes rise on those making $400,000 or more, but which froze in place the Bush tax cuts for everyone else.

People are talking these days that the deal is, in retrospect, problematic, since now Obama can't get additional revenue.

Says Orszag: "Objectively, stepping away from the politics of it away for a second, we're going to end up regretting making the middle class tax cuts part of it permanent."

Basically, current forecasts for discretionary spending are already unrealistically low out into the future, and freezing in current levels means there's no way the government will have adequate revenue to match realistic spending growth. Either that, or discretionary spending will have to "starve."

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