Congress calls it “The Middle Class Tax Relief and Job Creation Act of 2012,” but the phrase “job creation” is a bit pompous, in my opinion. Much like corporate tax cuts, you can’t guarantee that savings incurred through a payroll tax cut will automatically pay for new jobs unless you legally require them to do so. But it’s probably the best they can do without any new stimulus.
There were legitimate concerns with the bill that extended the federal payroll tax cut for the remainder of the year. Republicans were concerned that extending the cut would deplete funds from Social Security, which is mildly amusing to hear as conventional wisdom holds that they are the party of tax cuts and the Democrats are the party of entitlements. It came down to a choice between deficit reduction and lessening burdens on businesses, and while the bulk of the bill moves the latter forward, the former isn’t completely absent. Examples:
Unemployment. States with below-average unemployment rates will see their benefit periods shrink the most, to as little as 40 weeks. States with the highest rates could see benefits as long as 73 weeks. In addition, recipients must be required to remain in the labor market by looking for work, and to be screened for drug use if they have ever failed or refused a drug test. Assuming it’s legally possible, I’d sweeten the deal by requiring that 10 percent of an unemployment check go into a savings account, only accessible for emergencies. That would also go for . . .
Welfare. The Temporary Assistance for Needy Families program will continue for another year. However, recipients will no longer be allowed to access those funds at ATMs at strip clubs, liquor stores and casinos. Why not go further and turn the entire program into a system of vouchers, redeemable for housing, utilities, food, medicine, school supplies and any expenses needed for children? Seems like the best way to spend that kind of money.
Federal pensions. Civilian employees of the government and (OMG) members of Congress will be contributing more to their pension plans. That’s great, but until I see salary reductions for members of Congress, I won’t be convinced of their sudden benevolence. That part is a mere, trifling bone to throw at the many, many taxpayers who have been clamoring for it for years.
These are a couple of ways the Republicans could have won some longer-lasting federal savings, after factoring in the costs of any new bureaucracy (which could still use a hell of a lot of trimming). Anyone who got pissy about it would look like they wanted unemployment recipients to buy booze. So it would have been a good political sell, too.
