President Obama’s calling for it, so is his one-time top economic adviser. With unemployment stuck at around 9 percent, the administration is desperate for more economic stimulus, and the only way they think they can get it is by further cutting payroll taxes. They want to include those cuts in a bipartisan deal to raise the national debt limit.
But thus far, top Democrats and Republicans are making no promises.
“I think this is something we should take a look at,” said Senate Majority Leader Harry Reid (D-NV) at a Capitol press conference Tuesday. “We’ve analyzed this, we’ve considered this — we, the Democratic caucus has considered this — we have not arrived at a conclusion so I’m glad that this is an issue they’re talking about.”House Majority Leader Eric Cantor (R-VA) — one of the negotiators in the debt limit discussions — says he wants to keep the main focus on cutting federal spending.
“I know those kind of ideas are circulating,” he said at his Capitol briefing Monday, in response to a question from TPM. “Thus far, we have been very focused on trying to see where we can reduce federal spending right now, which seems to be sort of the direct quid pro quo as far as how we are going to even muster the votes to bring a debt limit increase to the floor. It has to be about real spending reductions now.”
The plan Summers envisions would add just over $200 billion to the federal deficit, by his calculation, and would hopefully create a small dent in unemployment. That may be all the administration can get at this point. Republicans have deep-sixed all calls for new spending, and the administration’s original 2009 stimulus plan — which eschewed long-term spending projects that may otherwise have been coming online now — is just about over. Which is part of the reason why top government economists say the hardest part of the economic recovery is yet to come.
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