Krugman thinks it is a bad deal. I think they should just let them expire based on budget realities. What would be best would be to couple this with a cut in payroll taxes. That would lower the cost of employing people and would mitigate any effect on unemployment.
Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class. Republicans, however, are having none of it. They have been filibustering Democratic attempts to separate tax cuts that mainly benefit a tiny group of wealthy Americans from those that mainly help the middle class. It’s all or nothing, they say: all the Bush tax cuts must be extended. What should Democrats do?
The answer is that they should just say no. If G.O.P. intransigence means that taxes rise at the end of this month, so be it.
But I expect the President will give in to satisfy his campaign pledge about not raising taxes on the middle class.