House Majority Leader Eric Cantor has tossed the final shovel of dirt onto the $450 billion stimulus plan. But it was never going to pass as a package anyway. Some elements still might, though, such as the payroll tax cut or the extension of unemployment benefits, especially if the Obama White House relents and accepts a tax holiday for the overseas earnings of U.S. corporations.
Now, Obama could have included that idea in his original proposal. Or a cut in the corporate tax rate. Or a cut in the capital gains tax rate. But that all assumes the goal was to find a bipartisan compromise rather than frame an issue for the 2012 elections. If Obama really desired to strike a deal, of course, he wouldn’t have offered to pay for the plan by raising taxes on the “rich”—a nonstarter for Republicans.
Ezra Klein suggests Team Obama should play hardball:
They can still refuse to sign anything the supercommittee produces if it doesn’t include a job agenda of similar size, and thus effectively use the trigger as leverage for a jobs plan. But as of yet, they have shown little interest in doing so. They have given a speech, but unlike the Republicans on the debt ceiling and the government shutdown, they have refused to use their procedural leverage.
So, in the end, Obama’s American Jobs Act ends up on the same policy trash heap as his deficit commission and his “framework” for debt reduction.