In his first column for The New York Times Tuesday, Orszag said an extension of the tax cuts, a major issue for the November elections, would help job creation. Letting them expire two years down the road would help reduce the nation's burgeoning deficit.
"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," he writes. "Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it."
Obama has said that he wants Congress to extend the cuts for individuals making less than $200,000 per year and families making less than $250,000, but wants the upper-income tax breaks to expire.
Congress is expected to begin debate on the tax cuts after they return from the August recess. But it's likely that no action will be taken until a lame-duck session after the elections.
—Jordan Fabian contributed to this report.