Orszag: Extend Bush tax cuts for 2 years

NEW YORK (CNNMoney.com) -- Peter Orszag, who recently stepped down as President Obama's budget director, called for a two-year extension of the Bush tax cuts in an article he wrote in the New York Times on Tuesday.

Orszag, who the paper identified as a contributing columnist, outlined the nation's "nasty dual deficit problem: a painful jobs deficit in the near term and unsustainable budget deficit over the medium and long term."

Whether to extend the Bush tax cuts, which expire on Dec. 31, is one of the most controversial political issues facing lawmakers. It pits the government's need to increase revenue by raising taxes against concerns that tax hikes could hurt the shaky economy.

Obama, in keeping with a campaign pledge, wants to raise taxes on families making more than $250,000 but keep them where they are for everyone else. Republicans in Congress generally want to keep all rates where cuts for everyone.

"In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether," Orszag wrote.

"[O]ver the medium term, the tax cuts are simply not affordable" but allowing the tax cuts to expire at the end of the year would "make an already stagnating jobs market worse," Orszag continued. (Tax expert Howard Gleckman on the GOP and the Bush tax cuts.)

He gave a nod to the position of his former boss. "Ideally only the middle-class tax cuts would be continued for now," he wrote. "Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it."

Orszag resigned from his job as the director of the White House Office of Management and Budget in July -- a position that he had held since 2009. He advised Obama during the push to enact the massive Recovery Act and the health care reform law.

After leaving the White House, Orszag took a position as a distinguished visiting fellow at the Council on Foreign Relations.

On Wednesday, Obama is expected to announce $200 billion worth of tax cuts for businesses to provide incentives to buy new equipment.