Right-Wing Media Ignore Tax Cuts In Obama's Jobs Bill To Spin Plan As "All About Tax Hikes"


Right-wing media are portraying President Obama's recently released jobs plan as being "all about tax hikes." In fact, more than half of the bill's cost comes from tax cuts for small businesses and extending the payroll tax cut for millions of Americans, which experts say will boost both employment and the economy.

Right-Wing Media Spin Obama Jobs Plan As "All About Tax Hikes"

Wash. Examiner: "How Obama Will Pay For This New Spending Bill ... [Is] All About Tax Hikes." In a September 12 editorial, The Washington Examiner wrote:

The Jobs Act, which is best described as Obama's Stimulus II, will cost somewhere around $450 billion -- more than half as big as Obama's first failed stimulus. White House Budget Director Jack Lew is the man charged with identifying how Obama will pay for this new spending bill. The answer will not surprise you: It's all about tax hikes. [The Washington Examiner, 9/12/11]

National Review Online: Jobs Bill Will Be Paid For By A "Set Of Massive Tax Increases." In a September 12 post on National Review Online, contributor Yuval Levin wrote that Obama's "proposed means of paying for the 'jobs bill' " is a set of "massive tax increases." [National Review Online, 9/12/11]

Hot Air: "WH Plan For How To Pay For Jobs Bill: Half A Trillion Dollars In New Tax Revenue And Then Let The Super Committee Figure It Out." On Hot Air, blogger Allahpundit titled a September 12 post about the jobs bill, "WH plan for how to pay for jobs bill: Half a trillion dollars in new tax revenue and then let the Super Committee figure it out." Allahpundit later suggested the proposal means "[Obama's] top priority is to improve his chances at re-election by making the GOP choke on raising taxes on the rich, an issue on which the public consistently sides with Obama in polling." [Hot Air, 9/12/11]

Hoft: "Shocker... Obama's 'Jobs' Plan Calls For $400 Billion In Tax Hikes." In a September 12 post on his blog Gateway Pundit, Jim Hoft wrote that Obama "is proposing tax hikes to help pay for his latest $447 Billion [sic] stimulus plan." [Gateway Pundit, 9/12/11]

But More Than Half Of Plan's Cost Is A Tax Cut For Employees And Employers ...

Washington Post: Jobs Bill "Is Composed Slightly More Of Tax Cuts Than New Spending." In a September 8 article, The Washington Post noted that Obama's jobs plan "is composed slightly more of tax cuts than new spending." The article also included the following graphics:

WaPo Chart

WaPo Chart

[The Washington Post, 9/8/11]

Washington Post: "$175 Billion" Of The Plan "Is An Extension Of And 50 Percent Increase In A Payroll Tax Cut." The Post article noted, "The centerpiece of Obama's plan, at a cost of $175 billion, is an extension of and 50 percent increase in a payroll tax cut that is set to expire at the end of the year." [The Washington Post, 9/8/11]

Washington Post: "Obama's Jobs Act Also Includes A $70 Billion Proposal To Offer Tax Cuts To Small Businesses That Hire New Workers." The Post article also noted, "Obama's jobs act also includes a $70 billion proposal to offer tax cuts to small businesses that hire new workers, and $62 billion in unemployment insurance." [The Washington Post, 9/8/11]

... Which Experts Say Will Have A Positive Impact On Employment And The Economy

Frank: "Perhaps The Most Promising" Policy To Reduce Unemployment "Is A Payroll Tax Holiday." In a June 25 New York Times op-ed, Robert Frank, economics professor at Cornell University, wrote:

If the economy could generate jobs at the median wage for even half of these people, national income would grow by more than 10 times the total interest cost of the 2011 deficit (which was less than $40 billion). So anyone who says that reducing the deficit is more urgent than reducing unemployment is saying, in effect, that we should burn hundreds of billions of dollars worth of goods and services in a national bonfire.

We ought to be tackling both problems at once. But in today's fractious political climate, many promising dual-purpose remedies -- like infrastructure investments that would generate large and rapid returns -- are called unthinkable, in the false belief that they would impoverish our grandchildren. Yet there are other ways to attack unemployment that could garner bipartisan support.

Perhaps the most promising is a payroll tax holiday. The payroll tax was originally meant to pay for Social Security, and in recent years, employees and employers have each contributed 6.2 percent of total salary -- with no additional levies on salaries beyond $106,800. Congress should both declare an immediate payroll tax holiday for employees and exempt employers from making contributions for newly hired workers -- and keep both provisions in effect until the end of next year. [The New York Times, 6/25/11]

CBPP: "Failure ... To Extend The Temporary Payroll Tax Cut" Would Remove "Needed Support From The Still-Weak Economy." In a September 7 post, the Center on Budget and Policy Priorities (CBPP) noted: "Failure by Congress to extend the temporary payroll tax cut enacted last December would reduce all paychecks starting on January 1, withdrawing needed support from the still-weak economy." From CBPP:

Failure by Congress to extend the temporary payroll tax cut enacted last December would reduce all paychecks starting on January 1, withdrawing needed support from the still-weak economy. The measure, part of the tax cut-unemployment insurance deal between President Obama and Republican leaders, reduces the employee share of the Social Security payroll tax, boosting workers' take-home pay by an estimated $120 billion in 2011. The tax cut is worth $934 to the average worker.


By extending the payroll tax cut -- and the provision of additional weeks of unemployment benefits to workers who have exhausted their 26 weeks of state-funded UI benefits without finding a job -- policymakers can avoid increasing the risk of renewed recession. But they should do more to reduce the probability of a double-dip recession and increase the probability of a sustainable recovery that generates sufficient jobs to shrink the massive jobs deficit. While a discussion of various steps needed to shore up the economy is beyond the scope of this paper, in the payroll tax arena, policymakers should consider strengthening the payroll tax reduction as part of a larger set of economic measures. [CBPP, 9/7/11]

Roubini: "What America Needs Is A Payroll Tax Cut." In a September 17, 2010, Washington Post op-ed, Nouriel Roubini, professor at the New York University's Stern School of Business, wrote:

A much better option is for the administration to reduce the payroll tax for two years. The reduced labor costs would lead employers to hire more; for employees, the increased take-home pay would boost much-needed economic consumption and advance the still-crucial process of deleveraging households (paying down credit card debt and other legacies of the easy-credit years).


Low-income workers have historically shown a much higher propensity to consume when given extra money, so the payroll tax cut should be designed to provide a larger-percentage break to those on the low end of the income scale compared with the upper middle class. [The Washington Post, 9/17/10]

Orszag: "To Mitigate The Harm To The Labor Market From ... Fiscal Drag, Policy Makers Should" Extend "The Existing Payroll Tax Holiday." In a June 30 Bloomberg column, former Office of Management and Budget director Peter Orszag wrote:

Given our feeble labor market, it is particularly important that policy makers avoid overly hasty deficit reduction. Official projections for the federal budget show fiscal tightening in excess of 2 percent of GDP from fiscal year 2011 to 2012. To put that percentage in context, consider that the fiscal tightening in the U.K. from 2010 to 2011 -- which has received so much attention in the news media -- amounted to less than 1.5 percent of GDP.

To mitigate the harm to the labor market from this fiscal drag, policy makers should provide additional macroeconomic support in 2012 by extending the existing payroll tax holiday. But more than that, Congress should link the payroll tax to the unemployment rate. This would allow the tax holiday to automatically calibrate itself to existing conditions, providing support only when the economy is weak. If necessary, the underlying payroll tax rate could be raised to make this mechanism budget-neutral. [Bloomberg, 6/30/11]

For more experts calling for a payroll tax cut, SEE HERE.

We've changed our commenting system to Disqus.
Instructions for signing up and claiming your comment history are located here.
Updated rules for commenting are here.