Despite economic circumstances and pleas from the left, the White House hasn’t shown much of an interest of fighting for additional economic stimulus. As far as the president’s team is concerned, the economy could use it, but there’s no point in begging Congress to pass measures Republicans won’t even consider.
But just this morning, we’re hearing the first hints of a possible policy shift.
President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages as they debate ways to spur hiring amid signs that the recovery is slowing, according to people familiar with the matter.
The idea, which is in preliminary stages of discussion, is among several being talked about at the White House as the economy holds center stage for the administration and Congress, the people said on condition of anonymity to discuss internal deliberations. […]
Targeting the employer side of the payroll tax could both attract Republican support and spur job growth, said Christina Romer, who was Obama’s first chairman of the White House’s Council of Economic Advisers.
“A cut in the employer side of the payroll tax could absolutely help accelerate job creation,” Romer, an economist at the University of California at Berkeley, said in an interview. “In addition to the usual beneficial effect on demand, this tax cut would make hiring less expensive.”
I’d prefer a more ambitious approach focused on public investment, but a payroll tax cut would certainly be an encouraging step in the right direction.
If it’s a trial balloon — and it may very well be one — here’s hoping it’s not shot down immediately.
Because this is still very much in the “talk about” phase, we don’t yet know how committed the White House is (or would be) to a cut in payroll taxes. It’s also unclear if such a measure would be freestanding or part of the ongoing debt-reduction talks — and if it’s tied to the latter, it’s less likely to happen.
The other question, of course, is whether such a measure could be approved by Congress. At this point, it’s just too soon to say — the proposal is a tax cut, which would ordinarily generate automatic support from congressional Republicans, but it wouldn’t be paid for and it would likely give the economy a boost, so GOP backing is hardly a given.
Still, there’s reason for at least a little hope. This is the first time in a long while we’ve heard anyone in Washington talk about an idea that might help the economy, rather than hurt it. At this point, I’ll take progress wherever I can find it.