Former Federal Reserve vice chairman Alan Blinder makes an excellent suggestion in today’s Wall Street Journal: Congress should let the Bush tax cuts for people earning over $250,000 expire in December and use the savings to pay for jobless benefits and other programs that “put more spending into the economy than the tax hike takes out, thus creating jobs.”
BEYOND THE NUMBERS
Tomorrow morning the Senate Finance Committee begins debate on what to do with the Bush tax cuts, which are set to expire at the end of the year. Here’s some homework to prepare for this important hearing:
My colleagues and I have written repeatedly (for instance, here, here, and here) about the need for Congress to enact another round of stimulus legislation that would extend unemployment benefits and provide additional fiscal relief to states, both of which would help strengthen the fragile recovery.
Today, the Center’s Executive Director, Robert Greenstein, and Director of Federal Fiscal Policy, Jim Horney, testified before the President’s Commission on Fiscal Responsibility and Reform. Here’s some of what they said:
A recent Heritage Foundation backgrounder would have you believe that President Bush’s tax cuts, two wars, and a new prescription drug program under Medicare “play a relatively minor role in the growth of future deficits.” Quite the contrary, the tax cuts alone are a huge factor.
With the country facing high unemployment and a weak economy in the short term and severe budget problems in the long term, you’d think that senators negotiating a jobs bill would be trying to maximize both its short-term economic boost and its long-term budget savings. You’d be wrong.
After we issued a report explaining why Senator Thune’s amendment to the pending jobs bill would essentially shut down much of the federal government through the end of the fiscal year (and blogged about it here), he responded that we were “confusing budget authority and outlays” (at around the 6:30 mark of this video clip). In reality, however, it’s the senator’s response that reflects an apparent misunderstanding of federal laws and budget processes, as we explain in a new report.
Senator John Thune’s amendment to the jobs bill may seem reasonable at first, but in reality it would essentially shut down much of the federal government from mid-July through September 30, the end of the fiscal year.
As my colleague Chad Stone explained this morning, today’s jobs report shows that “unemployment is still very high, and jobs are still hard to find.”