Rachel made the case on the show the other night that while deficit reduction is the talk of the town — if the town is Washington, D.C. — but given the larger economic circumstances, what policymakers ought to be focusing on is job creation and growth, not new ways to take money out of the economy.
Any chance Congress might be inclined to agree? Apparently not.
Republicans and Democrats are struggling to find common ground on a long-term debt deal. But as economic growth has weakened this quarter, they are at odds over what the flagging recovery needs in the immediate future, too.
The Obama administration is arguing that the sluggish economy requires a shot in the arm, and it included tens of billions of dollars of little-noticed stimulus measures in its much-noticed proposal to Congressional leaders last week. But Republicans have countered that the country cannot afford to widen the deficit further, and have balked at including the measures in any eventual deal.
It’s worth appreciating the extent to which the Republican position is incoherent. For one thing, they’re desperately fighting to protect Bush-era tax rates, without paying for them, which is a key driver of the annual deficit. If GOP policymakers prioritized fiscal responsibility above all else, they’d be pushing for these tax breaks to expire on time. They’re not.
For another, we’re still feeling the effects of a brutal recession, unemployment is still way too high, and there are plenty of economic storm clouds hovering. The American mainstream wants Washington to focus on getting Americans back to work and making the struggling recovery more robust, and Democrats are prepared to do that with policies that Republicans have traditionally supported, including the payroll tax break. For now, GOP policymakers simply don’t seem to care.
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