Possible Upcoming Stimulus?
Today, The Wall Street Journal has details on a range of new stimulus measures the Obama administration is considering pushing, given the sustained, high rate of unemployment and stall-out in the recovery. Deborah Solomon and Jonathan Weisman say that a nationwide infrastructure program and tax cuts are under consideration.
On the list of possible actions: additional tax cuts for small businesses beyond those included in a $30 billion small-business lending bill before the Senate. It’s not clear what those tax breaks would target or how much they might cost in lost revenue to the government.
Also in the mix: a possible payroll tax cut for businesses and individuals, as well as other business tax breaks, according to people familiar with the discussions. Currently, income taxes are scheduled to rise with the expiration of Bush-era tax cuts at the end of this year.
Of the measures under consideration, tax breaks would be the easiest to pass through Congress; in the Senate, new spending might be impossible to get past 41 Republicans plus Sen. Ben Nelson (D-Neb.), who has mostly refused any expansion of the deficit. And a broad-based but short-term payroll tax cut might be the best way to gin up hiring. If businesses are given a big incentive to hire, but only a short time to do it, that would provide the most immediate boost.