After seeing that dangerously tepid job creation in June and an uptick in unemployment rate, Democrats are now pushing the White House to include job creation measures in the final debt deal.
http://www.bloomberg.com/...
The June jobs info was a shock to the administration, Wall Street, and Congress. Perhaps that is what is needed to get Congress to act although I am not holding my breath.
However, because the debt deal is a must pass bill this can be the avenue to get more stimulus to help with job creation. Economists know that the debt will NOT go down unless people go back to work. As a result Democrats are pushing the White House to include job creation measures in any debt deal.
Senator Charles Schumer of New York, the chamber’s third- ranking Democrat, called for an “immediate jolt” to the economy by extending and enlarging a one-year payroll-tax cut that’s set to expire Dec. 31. He asked for action “as quickly as possible by including it in the final debt-limit agreement.”
Some of the ideas that may be included are:
Jared Bernstein, until recently Vice President Joe Biden’s chief economic adviser, predicted the White House would step up efforts to include in the debt deal additional infrastructure spending or a new temporary payroll tax reduction.
In addition to continuing a 2 percentage-point break in the employee payroll tax, the White House may push for an equal cut in the employers’ part of the levy, according to a Democratic official.
“It would be a mistake for them not to ratchet up the urgency on the jobs side, given the labor market really appears to be in a stall,” said Bernstein, now a senior fellow at the Center for Budget and Policy Priorities in Washington. “It’s not something you can ignore.”
Most likely any payroll tax holiday from employers and employees will be paid for by closing of tax cut loop holes and other tax revenue.
Schumer is also pushing for a national infrastructure project to be included in any debt deal. He proposes that part of the taxes that are parked overseas by companies to be used to finance a national infrastructure bank.