Neither party seems particularly keen on extending the payroll tax cut for another year. But its defenders are slowly beginning to emerge on the left.
Rep. Chris Van Hollen, the top-ranking Democrat on the House Budget Committee, said Sunday that another extension of the payroll tax cut “needs to be part of the conversation.” He argued on C-SPAN that extending the payroll holiday for another year — preventing a hike of two percentage points — was more critical to the economy than the Bush tax cuts for the richest Americans:
If you look at the nonpartisan Congressional Budget Office reports, they say that’s it’s a much bigger part of the economy than allowing the top rates to go up. It’s much more important because it means more money in the pockets of working Americans who go out and spend that money rather than sticking it in the safe deposit box … I think that’s got to be part of the mix.
Van Hollen also defended the payroll tax extension against the charge that it would deplete the Social Security Trust Fund, explaining that the lost money has been backfilled by general revenue for the last two years. (Opponents argue that this is a bad precedent that threatens Social Security’s protected status by making it part of general budget negotiations.)
But the top House Budget Dem also took pains to explain that he was “just speaking personally” about considering another payroll tax cut. To the extent that they’ve addressed it, Democratic leaders in the White House and Congress have indicated that it’s time for the payroll holiday to expire. Van Hollen, along with former White House economic adviser Larry Summers, are among the few to suggest otherwise.