It’s a good thing congressional Republicans “do not accept the legitimacy of scholars and intellectual authorities,” or by now, they’d start to feel pretty discouraged.
Today, Doug Elmendorf, the director of the Congressional Budget Office, spoke to members of the Murray/Hensarling super committee, at their first official hearing. He didn’t explicitly endorse President Obama’s American Jobs Act, but the CBO chief certainly endorsed the White House’s larger approach to the economy.
Elmendorf ‘s message: to avoid slowing the economy even further, the deficit must get worse before it gets better.
“If policymakers wanted to achieve both a short-term economic boost and medium- and long-term fiscal sustainability,” Elmendorf said, the “most effective” policy would be “changes in taxes and spending that would widen the deficit now but narrow it later in the decade.”
So, the director of the CBO wants to see a short-term boost in spending, a rejection of efforts to impose sharp short-term budget cuts, and a longer-term approach to debt reduction, including possible tax increases.
If this sounds familiar, it’s because President Obama wants the same thing, and has made this approach the basis for his American Jobs Act.
As Brian Beutler noted, the CBO chief wants “legislation that spends money to hire people and reduces payroll taxes in the near-term, and that reduces deficits by even greater amounts in the middle and end of the decade.”
Elmendorf even went so far as tout the benefits of a payroll tax break — which Obama wants and which Republicans oppose — as having the most significant economic impact.
Taken together, every credible observer with a pulse — the Fed, the CBO, a wide variety of economists, the financial industry, the bond market, business leaders — are all saying more or less the same thing. They all want policymakers to approve short-term stimulus and oppose drastic short-term budget cuts. GOP officials, of course, desperately want to do the opposite.