Harry Reid

Extend Unemployment Assistance by Cutting the War Budget

 Just over a week ago, the Senate fell one vote short of overcoming a Republican filibuster to pass a three-month extension of assistance for the long-term unemployed.

The New York Times reported:

A Contrarian Optimist View of the Upcoming Iran Nuclear Talks

When President Obama nominated global health superhero Dr. Jim Young Kim to lead the World Bank, Harvard development economist Dani Rodrik remarked, "It's nice to see that Obama can still surprise us."

Is it possible that Obama could pleasantly surprise us in the upcoming talks with Iran over its nuclear program? Much of the media coverage would suggest otherwise.

Nonetheless, there are actually quite a few positive signs that we can point to:

1. There have been no reported major explosions in Iran or assassinations of Iranian scientists recently, as have seemed to occur in the run-up to previous talks. This could be a sign that U.S. pressure on Israel and the Iranian MEK terrorist group is working to keep things quiet on that front. There is some evidence that this might be the case.

2. No-one appears to be talking about Israel much at all. Israeli officials appear to be keeping a relatively low profile, and Israeli Defense Minister Barak recently put forward a proposed list of Western demands that is at least on the planet of plausibility - in particular, Barak made no demand that Iran cease enriching uranium.

3. Thanks in no small part to the leadership of Senate Majority Leader Reid, Congress has also been relatively quiet. And this week Congress is out of session.

Shortening the War Would Pay for Half of the Payroll Tax Holiday

Shortening the war in Afghanistan by two years could easily pay half of the costs of an extension and expansion of the payroll tax holiday, the centerpiece of President Obama's jobs bill. Thus, the amendment put forward by Senator Merkley calling on the President to accelerate the drawdown in Afghanistan - which the Senate may vote on today - could make a significant contribution to creating more than half a million American jobs next year.

 

On Monday, Senate Democrats introduced legislation to extend the payroll tax cut. According to Majority Leader Reid, under the bill the average working family would have close to $1,500 a year more to spend. As the New York Times noted, "lower- and middle-income workers are the greatest beneficiaries of the tax cut."

 

Unfortunately, press reports indicate that Senate Republicans are very unlikely to support the bill, because to pay for the payroll tax holiday - which also would reduce the tax paid by employers - Democrats propose a 3.25 percent tax on gross income over $1 million.

 

From the point of view of the 99%, the appeal of paying for the payroll tax holiday with a tax on the very rich is obvious. As Paul Krugman has noted, the economic case for increasing taxes on the very rich is compelling.

 

However, if - as expected - the current Senate bill goes down to defeat due to Republican opposition, the question of how to pay for the extension of the payroll tax holiday will remain, so it makes sense to get some other good ideas for debt reduction which could pay for the tax holiday on the table.