The biggest debate in Washington as the year closes is how long — or if — to extend tax cuts passed during the Bush Administration.
It appears that Democrats will concede to Republicans and extend the tax cuts for another few years, in exchange for an extension of unemployment benefits, which are set to expire.
But one former Republican leader has his own idea: let senior business leaders decide.
“What Republicans ought to do is say to people who create jobs, how many years does the tax code need to be extended for you to make an investment decision?” former Speaker of the House Newt Gingrich told Fox News’ Chris Wallace on Sunday. “I mean, the goal’s not to have an annual extension of the current tax code, and then have every business in the country trapped saying, ‘I don’t know. I want to make a 20 year investment in a factory.’”
“Let’s say the compromise were two years, or three years, would you sign on to that?” asked Wallace.
“There is a number, but I would have the business leadership of the country describe the number,” Gingrich replied.
“And would you agree to extend the unemployment benefits as part of that deal?” Wallace queries.
“I would agree to a short-term extension of unemployment,” Gingrich responded. He then proposed, “we change the entire [unemployment benefits] program into a worker training program and not give anybody money for doing nothing.”
Video of Gingrich’s remarks was first captured by ThinkProgress.
The a liberal blog lambasted the idea.
“Gingrich’s proposal, to cut off unemployment benefits while giving a massive windfall to the most fortunate, is a recipe for skyrocketing unemployment,” the blog’s Ian Millhiser writes. “The economy grows by nearly two dollars for every dollar spent on unemployment benefits ‘because recipients typically spend all of their benefit payments quickly’ The money ‘ripples through the economy into supermarkets, gasoline stations, utilities, convenience stores.’ Flush with the revenue provided by these new consumers, those businesses are then able to hire additional workers and diminish the ranks of the unemployed.”
“Tax cuts for the rich, on the other hand, are only marginally more useful than simply burning the money,” Millhiser continues. “Indeed, corporate America is presently sitting on a massive $1.6 trillion in cash reserves, but their actions in recent months demonstrate that business leaders would rather let this money grow mold than actually spend it to put Americans back to work. Gingrich offers no explanation for why simply giving the rich even more money to hoard will magically cause them to spend it on hiring people.”