Congress can kill two birds with one stone when President George W. Bush’s tax cuts expire in December. It can – and should – extend cuts for strapped middle-class families while America digs its way out of recession. It should also let the tax cuts for the wealthiest 2 per cent of households expire, as a wide range of economists recommend, to make a sizeable dent in the nation’s unsustainable longer-term budget deficits.

Our leaders face the enormous challenge of navigating economic policy through a narrow channel. The president and Congress must provide near-term support for an economy still struggling to recover from a devastating recession, while simultaneously addressing longer-term structural budget deficits. Extending the middle- class tax cuts but permitting tax cuts for the wealthy to expire on schedule supports both goals.

Yet some conservatives, many of whom cite red ink to oppose emergency measures such as a temporary extension of unemployment insurance that would hardly affect longer-term deficits, are threatening to block the extensions of middle-class tax cuts unless Congress also includes about $750bn in tax relief over the next decade for the top 2 per cent of earners, whose average annual income is $800,000. Unfortunately, a few centrist Democrats are joining the conservative stampede to extend the Bush tax cuts for this sliver of households.