Ideally, the White House would be pushing an ambitious approach to stimulating economic growth and job creation, but the West Wing isn’t inclined to invest energy in a plan that can’t pass. Instead, there’s growing support, from President Obama and others, for a payroll tax cut, which would at least be a step in the right direction.
Indeed, the Wall Street Journal reports that White House officials brought up this and related ideas during closed-door debt-reduction talks yesterday, suggesting this is moving beyond the talk-about phase.
For Dems, this may seem like an attractive option because they don’t have much of a choice. Since the GOP opposes public investment for philosophical reasons, it’s either this or nothing. And with Republicans reflexively supporting every tax cut, this shouldn’t be too tough, right? Wrong.
[T]he payroll tax idea received a lukewarm response on Capitol Hill. Even Sen. Orrin G. Hatch (R.,Utah), a strong past supporter of payroll tax relief, reacted cautiously. “I’d like an independent analysis of its effectiveness,” he said.
Keep in mind, Hatch has always supported this idea, and has never cared a lick about independent analysis of the efficacy of tax cuts. Is he balking now because President Obama wants the same thing, or is Hatch concerned the idea might work?
House Majority Leader Eric Cantor (R-Va.), meanwhile, told Brian Beutler that talk of a payroll cut is “circulating,” but the Republican wouldn’t commit either way.
Under the circumstances, I suppose the fact that GOP officials haven’t ruled this out entirely is a good sign.
Meanwhile, the NYT‘s David Leonhardt argues this morning that participants in the bipartisan talks “will need to increase the deficit in some modest, targeted ways that could increase hiring … [and] at the same time, negotiators will have to find enough medium-term spending cuts and tax increases to bring down the deficit soon.”
Doing so, Leonhardt said, “will require some political maturity.”
I’m afraid that means success is impossible.