Something About This Plan Seems Awfully Familiar

Indiana Gov. Mitch Daniels is the latest Republican offering unsolicited advice on fixing the economy, and it looks very familiar...only with a starkly mean-spirited GOP twist as Ezra Klein points out, but it's not altogether different from what Obama is proposing this week.

Instead, it begins with a payroll-tax holiday. Daniels would like to see the tax suspended for a full year. He then offers four policies that would "offset the revenue loss twice over," though I'm quite sure the CBO wouldn't agree with that assessment: recalling unspent TARP and stimulus funds; giving the president the power to "impound" congressional spending projects in order to spend less; a federal hiring freeze; and "some sort of regulatory forbearance period in which the job-killing practice of agonizingly slow environmental permitting is suspended."

Daniels thinks it "fanciful" to imagine that the Obama administration would adopt some variant of this plan, but these are hardly alien ideas to them: The White House has been weighing a payroll-tax holiday for weeks; Peter Orszag, in his role as OMB director, proposed a more Congress-friendly variant of Daniels's impounding powers; a hiring freeze is a bit of a blunt tool, but it's not that far off from the discretionary spending freeze that the administration is already supporting. The outlier here is the regulatory forbearance period: I could see the argument for something like this in the financial sector, where regulators got very aggressive at the same time banks got very cautious. But the White House won't buy it in the environmental space.

The convergence is clearest in Daniels's sixth and final suggestion: "Accelerated or full expensing of business investment." As it happens, the administration is announcing a policy to do exactly that later this week. It appears that one of the editors informed Daniels of this, as the paragraph now ends with this parenthetical: "Reports indicate that the administration is about to propose this very idea. If so, good." 

Hmm, the plan seems to be exactly what Obama is proposing more or less.  But my problem is that the same guy saying that "where's the jobs?" is asking for federal hiring freeze as well as a pay freeze.  No offense to Ezra, but I'm thinking A) that won't affect Congress, and B) we need all the jobs we can get, even if it's file clerks at the patent office.  Also, why should federal employees have to be made to suffer?  Last time I checked they bought groceries and piano lessons and bath soaps and house paint from private sector stores just like other Americans.  Employed federal employees working, getting wages and paying taxes have to be preferable to unemployed people living off government dole, yes?

Not if you're a Republican, apparently.  Who honestly proposes a hiring freeze in the middle of nearly ten percent unemployment?  That's just idiotic.  If the government needs to hire people, they should.  A blanket hiring freeze is just silly.

And notice how except for that, Daniels's plan is what Obama's been working on for a while now.  Go figure.  Business tax cuts and a payroll tax holiday.

Of course if a Republican proposes it, it's a brilliant idea, right?  Hey Mitch, rule of thumb:  if your stimulus plan takes more money out of the economy then it's putting back in, it's not a stimulus plan.

[UPDATE]  Jon Chait takes Mitch Daniels's little plan here out back and takes a 20-pound sledge to it.

But it's okay, Mitch. You put out a real plan. Sure, you rely on magical Constitutional thinking and empirically false analysis of federal pay. And your savings only make it 9% of the way to your stated goal. And the four revenue offsets you promised is really only three offsets plus one unrelated ideological hobbyhorse. But it was a good try. Look at Sarah Palin and Newt Gingrich over there -- they fell down after only a few yards! You should really think about running for president.

Ai-ya.  Not that Mitch doesn't deserve this level of snark, but...da-yamn.