MIXED SIGNALS…. With the economy struggling to break out of its funk, many are asking what, if anything, the White House intends to do next. Reading the tea leaves is proving to be a bit of a challenge.
ABC News reported last week that leading officials had no intention of pushing significant new proposals, beyond what’s already on the table. The Wall Street Journal reported earlier this week that leading officials are actually considering a sizeable new package.
A few days later, President Obama’s outgoing chief economist said what the economy needs is more stimulus. This was immediately followed by President Obama’s press secretary saying that “some big, new stimulus plan is not in the offing.”
As of this morning, the Washington Post has a front-page piece suggesting a stimulus-esque tax-cut package is receiving “serious” consideration.
With just two months until the November elections, the White House is seriously weighing a package of business tax breaks – potentially worth hundreds of billions of dollars – to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.
Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States. […]
More spending on infrastructure, particularly transportation projects, is also under discussion. But it would be easier for a package composed purely of tax cuts to “avoid the stain of a ‘bailout’ or ‘stimulus’ label,” said one official familiar with the talks, speaking on the condition of anonymity because the deliberations were private.
Great, the most effective policy in boosting the economy doesn’t sound good, so it’s more likely we’ll see proposals touting less effective measures.
Given the mixed signals of late, it’s worth noting that Politico has a report similar to the Post‘s, explaining that administration officials are “mulling a raft of emergency fixes to stimulate the economy before the midterms, including an extension of the research and development tax credit and new infrastructure spending.”
It’s hard to evaluate any of these ideas without more details, and for that matter, no matter what the White House recommends, Congress’ inability to function makes progress unlikely for the foreseeable future.
That said, it’s at least somewhat encouraging to see a shift away from “everything’s on track, so just be patient.” Moreover, there’s obviously real political salience to even just having the debate — with two months before the midterms, it’s worth having the two parties fight over how to help the economy grow. If Republicans intend to kill every proposal the White House offers, that should matter to voters, too.
The Post‘s report concluded that President Obama “could roll out additional measures as soon as next week.” Stay tuned.