Time’s Almost Up for $152 Billion in Expiring Provisions

America is increasingly governed by temporary policies. The 2001/2003/2010 tax cuts get most of the attention, but they are hardly the only ones. There are also a host of other semi-permanent provisions like patching the alternative minimum tax (AMT), avoiding big cuts to what Medicare pays doctors (the “doc fix”), and a plethora of miscellaneous tax cuts that get extended every year or two (the “extenders”).

And then there are the policies that really are supposed to be temporary, but likely won’t be retired until the economy strengthens. They include the 2% payroll tax holiday and extended unemployment insurance, both of which Congress is debating this week.

Over at the Pew Fiscal Analysis Initiative, Carla Uriona, Evan Potler, and Ernest Tedeschi have put together a nice infographic of all the provisions scheduled to expire at the end of the month. The 2001/2003/2010 tax cuts aren’t included, since they expire at the end of 2012, but there is still plenty of action:

In the near-term, the big money is in the payroll tax cut and unemployment insurance. Extending those provisions for one year would add about $164 billion to the deficit, not including interest costs. Over the next decade, however, the really big money among these provisions comes from patching the AMT ($690 billion) and the extenders ($356 billion). (Extending the 2001/2003/2010 tax cuts, in comparison, comes in around $4 trillion.)

About Donald Marron 294 Articles

Donald Marron is an economist in the Washington, DC area. He currently speaks, writes, and consults about economic, budget, and financial issues.

From 2002 to early 2009, he served in various senior positions in the White House and Congress including: * Member of the President’s Council of Economic Advisers (CEA) * Acting Director of the Congressional Budget Office (CBO) * Executive Director of Congress’s Joint Economic Committee (JEC)

Before his government service, Donald had a varied career as a professor, consultant, and entrepreneur. In the mid-1990s, he taught economics and finance at the University of Chicago Graduate School of Business. He then spent about a year-and-a-half managing large antitrust cases (e.g., Pepsi vs. Coke) at Charles River Associates in Washington, DC. After that, he took the plunge into the world of new ventures, serving as Chief Financial Officer of a health care software start-up in Austin, TX. After that fascinating experience, he started his career in public service.

Donald received his Ph.D. in Economics from the Massachusetts Institute of Technology and his B.A. in Mathematics a couple miles down the road at Harvard.

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