The talk this morning is all about the tax cuts included in Barack Obama’s stimulus package, which is understandable, but also a bit misleading. Some of my colleagues are acting as if the $1000 tax break for families with incomes under $200,000 is some sort of surprise or shocker–interesting, since Obama promised it in every single speech during the campaign. He also mentioned tax credits for businesses that add jobs in just about every speech, although this is a more complicated idea–do companies that have laid off workers get credit for rehiring them?
The reportorial emphasis on the tax cuts is understandable because we’ve lived in a culture of tax cutting for the past thirty years: it’s what journalists understand. But it’s misleading because the far more important part of the stimulus plan will be the investment side of the equation–the infrastructure programs, especially green infrastructure, which Obama has said will be the “turbo-charger” of the next economy. Not surprisingly, the House Republican Leader John Boehner, has the priorities all wrong. He loves the tax cuts, which provide short-term economic (and political) relief, and is skeptical about the investments which, if done well, will provide long-term growth:
“I remain concerned about wasteful spending that might be attached to the tax relief. Simply put, we should not bury future generations under mountains of debt,” Boehner said.
Of course, Boehner was front and center for the Bush tax cuts, wars and ill-conceived Medicare drug plan that have already buried future generations under a mountain of debt. Happily, though, those days are over. The Obama stimulus plan will be judged a success in the long-term, not the short-term–and its long-term success will be predicated on the stuff that hasn’t been presented in detail yet: the specific programs that will encourage greater efficiency (see Michael Grunwald’s excellent piece in this week’s Time) and conservation, as well as alternative energy sources and a 21st century electric grid.
Tax cuts are easy for journalists to understand. Creative investments are harder. I’m hoping my colleagues–especially the TV folks–will make the effort to understand what the new administration is actually all about instead of continuing to report the familiar: the now-anachronistic policy matrix of the Reagan Era.