A Modest Proposal
Resolved: That the nation's unemployed pay for renewed tax cuts for the nation's high-income earners.
The term "modest proposal" was popularized by Jonathan Swift, who argued in a satirical essay that the Irish should sell off their "surplus" children as food.
I'd like to offer a proposal that may sound just as satirical, but is based in sound dollars and cents.
We know that Senator Stabenow brought S. 3706 to the Senate floor, just as she promised to. She submitted a discharge resolution that failed to gain unanimous consent, thanks to the objection of Senator George LeMieux (R-FL). His objection?
"we need to know what it's going to cost, we need to know how we're going to pay for it so we don't put this debt on our children and grandchildren."
Those are fine enough words from the Senator, but they tend to lose their rhetorical strength when Republicans in the Senate are willing to fight for renewed tax cuts for incomes over $250,000, without providing offsets for the estimated $700 billion the tax cuts will cost.
Well, let's talk costs, and let's talk who's going to pay.
We've seen testimony that unemployment benefits grow the economy: they're one of the biggest bangs for the buck around. One dollar of unemployment benefits grows the economy by $1.61 of GDP within one year.
Let's use that $1.61.
Here's my proposal: for each dollar of emergency unemployment compensation (EUC), including additional tiers, that Congress allocates, let's also trigger 61 cents in tax cuts for incomes greater than $250,000.
For example: the last EUC extension was estimated to cost roughly $33 billion - if the econometric models are correct, that extension will grow the economy by $53 billion, and from our modest proposal, would trigger $20 billion in tax cuts.
There aren't many sources of PAYGO funding available: EUC would have to displace other discretionary spending, and that only takes from one group to give to another - a win-lose situation. Likewise, using ARRA funds would take stimulus dollars away from other programs, and TARP funds are restricted-use.
Using EUC to trigger tax breaks, however, would be something everyone can support: the 99ers would get the additional tiers of assistance we need. The economy would benefit, and Republicans would get the tax breaks for high incomes that they want. Win-win.
I'd like to hear your thoughts.