US President Barack Obama delivers a statement to the press on tax cuts and unemployment insurance.
US President Barack Obama delivers a statement to the press on tax cuts and unemployment insurance. - 
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Tess Vigeland: Today President Obama explained his decision to compromise with Republicans on extending tax cuts for everyone, even the rich. The president said the deal will give the country some breathing room to look at long-term solutions to the deficit. But members of his own party on Capitol Hill cried foul and demanded changes to the plan before it goes to a vote.

Meantime, we asked Marketplace's Nancy Marshall Genzer to look at some of the options for getting the deficit down in the face of a tax cut extension.

Nancy Marshall Genzer: The tax cut extension plan would add billions to the deficit. President Obama says what we'll need next are concrete deficit reduction measures. Like:

Barack Obama: Looking at the tax code and saying, what's fair, what's efficient?

The president's deficit reduction commission has already recommended simplifying the tax code, lowering rates and eliminating or reducing write-offs like the deduction on interest on your mortgage. Maya MacGuineas heads the Committee for a Responsible Federal Budget. She says the next Congress should tackle the tax code but also Social Security and Pentagon spending. Every spending category has its defenders on Capitol Hill. But MacGuineas says there is a way around the special interests. On the tax code, for example, keep tax breaks as they are but limit them.

Maya MacGuineas: So that no household or individual's tax breaks could be more than 1 or 2 percent of their total income. So that you start limiting them in that way, scaling them back, without the political challenge of going after them one at a time.

Larry Sabato teaches political science at the University of Virginia. He doesn't think Congress will change one bit of the tax code, letting our deficit and debt grow and grow.

Larry Sabato: And unfortunately, that could create a situation for us, not unlike that of Greece and Ireland.

In this worst-care scenario, Uncle Sam's credit rating gets whacked, and we pay higher interest rates on our soaring debt.

In Washington, I'm Nancy Marshall Genzer for Marketplace.