Josh has said everything that needs to be said about “decoupling,” so this post is, I’ll admit, a bit superfluous:
While the “decoupling” idea is undoubtedly politically shrewd, it should go without saying that it is much worse for the country’s fiscal future than extending all of the tax cuts for two or three years and then letting the 2001 and 2003 tax cuts expire as a down payment on a serious overhaul of the tax code designed to raise more revenue at lower cost to the real economy. At least some self-described fiscal conservatives will claim that the bulk of the 2001 and 2003 tax cuts should be preserved as a counterweight against wage dispersion. But is this actually a more effective approach to mitigating the negative effects of wage dispersion than adequately funding high-quality, cost-effective social programs?
One gets the strong impression that “decoupling” places partisan point-scoring ahead of the country’s fiscal future. Fiscal conservatives condemn this behavior when it comes from Republicans, and I hope they’ll condemn it when it comes from Democrats.