A Grand Bargain Must Include Stimulus
Posted at 9:30 a.m. on Nov. 16, 2012
Matthew Yglesias thinks that lawmakers are ignoring the most important part of the “fiscal cliff” for boosting the economy: the expiring payroll tax cut.
“The Bush tax cuts are mainly about conservative long-term growth strategy (incentivizing the job creators) with a hefty dose of middle-class income boosting through tax credits and deductions thrown in to make the medicine more palatable. The payroll tax holiday, by contrast, was actually designed to be an economic stimulus measure… Now with the election in the bag, the White House seems to care more about the odds of bolstering Obama’s legacy with a grand bargain on the long-term fiscal picture than with addressing the short-term jobs crisis.”
“If this expiration were happening on its own, it seems overwhelmingly likely that intelligent people in both parties would see that clearly. But the coincidence that the holiday ends at the same time as the Bush tax cuts has left the issue languishing in obscurity.”