Once the President floated the idea of extending the payroll tax cut, and the idea of adding an employer-side tax cut to that, us blogger types analyzed and debated the merits of the action. I talked to a bunch of economists about whether the employer-side tax cut would create jobs or do little. People like David Leonhardt advocated for a targeted tax cut that only kicked in if hiring increased. Question: isn’t that the same as the job hiring tax cut?
“Well they’ve tried this once, and it hasn’t seemed to be working,” said Rep. Jeb Hensarling (R-TX).
His Senate counterpart, Lamar Alexander (R-TN) echoed this view.
“We don’t need short-term gestures, we need long-term strategies that build into our system simpler taxes, lower taxes, fewer mandates, lower costs, more certainty, any changes in the debt structure of tax reform ought to come out of the Vice President’s talks or part of a major tax reform,” Alexander said. “If short-term government programs work, we wouldn’t have 9% unemployment today because the government has tried it. So we’ve proved that doesn’t work, unfortunately.”
The Washington Post got a GOP aide to say that the concept of pairing short-term stimulus with long-term deficit reduction is “pure, unadulterated nonsense.”
So there you have it. We’ve come to a point where Republicans are rejecting tax cuts – tax cuts! – because the White House supports them and thinks they would help the economy. Maybe this is good for the President politically. He can expose Republicans as interested in crashing the economy as a political end in itself. But that’s a small comfort for the economy. And furthermore, the President should actually feel free to advocate for things that are actually worth doing at this point. As long as Republicans are going to knee-jerk oppose, they ought to knee-jerk oppose something like direct job creation, something that has a chance of working.