December 22, 2012

Obama gives up on boosting the economy

Suzy Khimm, Washington Post -  In his original offer, Obama asked for $425 billion in stimulus through jobs measures and tax extenders, according to the Committee for a Responsible Federal Budget, including $50 billion in infrastructure spending and other stimulus measures; mass mortgage refinancing to boost the housing market; $30 billion in unemployment extension; a $115 billion extension of the payroll tax holiday; and the extension of a host of business tax breaks known as extenders.

... In his third offer, reported Monday, Obama dropped his ask from $425 billion to $175 billion in stimulus, as my colleague Dylan’s chart shows below, keeping the federal extension of unemployment insurance, infrastructure spending and some business tax breaks, but abandoning the extension of the payroll tax holiday, among other major measures.

... The White House’s abandonment of the payroll tax is of particular concern to economists and advocates who believe that more stimulus is necessary while the economy continues to recover — particularly if Democrats and Republicans fulfill their stated promise of passing a major deficit reduction package that will begin some of its austerity in the near term.

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