One of the White House’s top economists Thursday said recent good economic news is a sign that the economy continues to recover slowly, and suggested it’s still susceptible to shocks — specifically the possibility that Congress will fail to extend the payroll tax cut through the end of the year.
“If you look at the statistics that are coming in, it’s clear that they’re painting a picture of an economy that is slowly recovering — slowly but surely recovering,” said Council of Economic Advisers chairman Alan Krueger at an event hosted by the Center for American Progress. “I think it’s extremely important that we keep that momentum going forward. The steps that I would highlight most importantly are extending the payroll tax cut through the end of the year and extending unemployment insurance benefits. The CBO concluded that of all the measures we’ve looked at, extending unemployment benefits have the most bang for the buck in terms of supporting demand, raising economic growth and creating jobs.”
After a December that fight left Republicans bloodied, Congress was only able to extend 2011’s payroll tax holiday, and emergency unemployment benefits, for two months. Members of both parties have committed to extending both through the end of the year, but significant differences remain between the parties over how to pay for it and whether extraneous policy riders should be attached to the legislation. Reconciling those differences will be Congress’ first key test when it returns later this month.
Additional reporting by Sahil Kapur.
