With the small fry measures in the American Jobs Act almost out of the way, the debate turns to the largest measures in the bill, particularly the payroll tax cut. While this is another example of a tax expenditure, at least this one goes to the working poor as well as everyone else, and it generally acts as a 2% wage increase in paychecks, which for the worker making the median income means $1,000 a year. There are valid concerns about how this impacts the Social Security Trust Fund, but the consensus take is that a fragile economy cannot afford to pull back on this boost to discretionary income, which will have an impact on consumer spending and the broader economy.
Sam Stein reports that the Obama Administration plans to make a federal case out of this over the next month.