The Agenda

Josh Barro on Payroll Tax Pay-Fors

In the Washington Examiner, Josh Barro argues that finding “pay-fors” for a temporary payroll tax cut is a fool’s errand:

Congress has gotten hung up on the issue of how to “pay for” the payroll tax holiday, and indeed the main reason the Senate passed a 60-day extension is that bipartisan agreement could only be reached on enough “pay-fors” to cover 60 days. But the idea of a “pay-for” is a red herring and should be abandoned. …

[T]he payroll-tax holiday is a fiscal stimulus measure: The whole point of the policy is that it leads to larger deficits for a period. The needs for fiscal loosening in the short term and tightening in the long term are real, but that does not necessarily mean they should be included in the same bill. A pay-for requirement might make sense if we are worried that, once the economy improves, Congress won’t have the tools it needs to do the necessary fiscal tightening. But five automatic triggers are already in place that would sharply shrink deficits in the coming years without any congressional action.

Josh makes a strong case.

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

Most Popular

World

Trump and the North Korean Tipping Point

The world has been stunned by North Korean dictator Kim Jong Un’s announcement last week that he was suspending his country’s nuclear tests in preparation for the impending meeting with President Trump. Even critics have had to concede that Trump’s bellicose rhetoric since last summer regarding the North ... Read More
Politics & Policy

E Pluribus . . . Gridlock

A mantra we hear everywhere these days is that diversity is a good thing. And no doubt, it is. Diversity facilitates an exchange of ideas and opinions, and it promotes economic growth. Moreover, the alternative to diversity is to suppress the views and opinions of some subset of citizens, which is completely ... Read More
Economy & Business

Trade Misunderstandings

I was distracted by other policy topics last week but not enough not to notice Peter Navarro’s article in the Wall Street Journal, headlined “China’s Faux Comparative Advantage.” Considering Navarro’s position in the White House, it is unfortunate that it demonstrates some serious misunderstandings ... Read More