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Monday, December 09, 2019

President Obama instituted a payroll tax cut for workers as part of his stimulus in 2009, and continued it as part of his late 2010 negotiations with congressional Republicans. Just about every independent economist or fiscal analyst will tell you putting money in the pockets of consumers who are most likely to spend it boosts aggregate demand in the economy and stimulates economic growth. Michael Pond, a Barclays analyst, gave a dire warning to Republicans obstructing another extension of the tax break:

This will prove a key flashpoint in the assessment of Republican elected officials by the electorate: do they deny the working class tax cuts, guaranteeing lower economic growth and thus hurting the president they loathe? Or will they do what the Constitution — and their constituents — want them to do, and help the middle class? Voters always tell pollsters they want the parties to work together for the common good, and Republican elites are playing with fire if they gamble on sneaking this one by the public.

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