Corporate America Is Hoarding Tons of Cash: Why In the World Would Obama Think About Giving Them More Tax Cuts?
Continued from previous page
That might make good sense in a rational world in which intellectually honest parties made serious arguments about how best to further the common good. That is not the case, however, and the real danger in implementing a “temporary” payroll tax break is that when it is set to expire – perhaps in the heat of an election – conservatives will accuse anyone who doesn't vote to extend the cuts, perhaps indefinitely, of “raising taxes” on “job producers.” This is what has happened with Bush's “temporary” tax cuts – cuts that were set to expire last year, but remain on the books despite the fact that they represent the biggest driver of the federal deficit over the next decade.
If the “temporary” cut to the payroll tax were similarly extended, it would result in turning a completely false conservative talking point into a reality. In the real world, Social Security's finances are not only very solid, the program also hasn't added a penny to the federal deficit. If the loss in payroll tax revenues were made up out of the general fund (as the workers' payroll tax holiday is structured), that would change the program's long-run financial picture dramatically. Suddenly, Social Security would be adding to the deficit, which would make defending the program that much harder.
That the White House would consider making such a gamble for such a modest potential payoff isn't just a sign that they underestimate their opponents' tendency toward scorched-earth tactics; Obama's advisers appear to have genuinely embraced some of the corporate right's most dubious arguments. As Dave Johnson noted last week, “White House economic adviser Austan Goolsbee argued against efforts to boost the economy, saying that the jobs market 'is on a trajectory of improvement'," and Gene Sperling, another top adviser, embraced the ludicrous notion that employers aren't hiring because of some ill-defined lack of “confidence” caused by high deficits.
Even worse, last week the White House rejected a modestly priced jobs bill Senate Dems had cooked up, saying that it was “too expensive.” At issue was the fact that it would have cost $175 million dollars more than the White House had requested for an existing jobs program – that's about what it costs to keep troops in Iraq and Afghanistan for nine hours.
This is all consistent with the administration's decision to try to thread a difficult needle on spending, deficit reduction and job creation. Rather than push back on the core idea that cutting deficits in the midst of a painfully slow “recovery” is anything but madness, they've tried to walk a line that says, "yes, the deficit is a pressing problem, but we'll address it in ways that are less painful than our Republican adversaries."
And the problem with that is simple economics: inflicting deep cuts to the public sector to finance more tax cuts for the wealthy is bad policy that can't lead to anything other than more economic pain for America's working majority.
Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy: And Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America . Drop him an email or follow him on Twitter .