After watching the economy swing toward recovery then sputter then grind to a halt, the Obama administration is reportedly — finally — drafting a new legislative proposal meant to spur job growth, two months before the midterm elections in November. None dare call it stimulus, but the package, according to The Washington Post, will be designed to appeal to Republicans. It could include a payroll-tax holiday and an extension of the recently expired research-and-development tax credit, and could cost hundreds of billions of dollars.
The reaction on the Hill hasn’t really materialized yet — members are still away on recess, and the proposal hasn’t been widely circulated. But the prospect of tax cuts must have Republicans giddy with anticipation, right? Maybe.
“Look, we need to work in a bipartisan way to end Washington Democrats’ out-of-control spending spree, stop their tax hike on American families and small businesses, and create jobs,” said Michael Steel, spokesman to House Minority Leader John Boehner, in response to the Post story. “If they’re serious about doing those things, we will work with them.”
Steel added, “we can’t really comment on proposals we haven’t seen.”
A Senate leadership aide tells TPM that there is Republican support, at the very least, for extending the R&D tax credit — Sen. Orrin Hatch (R-UT) has proposed legislation to do just that.
Even if the legislation can pass in Congress, it’s unlikely that its stimulative effects would kick in early enough to help Democrats this fall. Additionally, there’s very little information about the plan itself: would the payroll tax holiday apply to workers, or just business owners? How long would it last?
Though Republicans have been saying for months that the expiring Bush tax cuts should be renewed despite the expected impact on the deficit, expect them to bristle at the cost of anything Obama proposes — and maybe even press Congressional Democrats to cut spending to pay for the package.
With the unemployment rate for August at 9.6 percent, President Obama will address the media this afternoon from the Rose Garden, and could offer some clarity on the plan. Either way, though, there’s one word you won’t hear him say: “stimulus.”
Yesterday, in a statement to TPM, White House spokeswoman Amy Brundage said “There have been a lot of reports and rumors on different options being considered, many of which are incorrect. The options under consideration build on measures the President has previously proposed, and we are not considering a second stimulus package. The President and his team are discussing several options, as they have been for months, and no final decisions have been made.”
And at the White House press conference yesterday, Press Secretary Robert Gibbs insisted a “big, new stimulus plan is not in the offing.”
