For the umpteenth time in the last two years Democrats are going to “pivot to jobs.” This time, according to President Obama’s former chief economist, they better be serious.
In a Wednesday Washington Post op-ed, Larry Summers issues his most dire public warnings about the economy since leaving the White House.
“With growth at less than 1 percent in the first half of this year, the economy is effectively at a stall and facing the prospects of shocks from a European financial crisis that is decidedly not under control, spikes in oil prices and declines in business and household confidence,” Summers writes. “The indicators suggest that the economy has at least a 1-in-3 chance of falling back into recession if nothing new is done to raise demand and spur growth.”
Democrats’ legislative options are limited. But Summers suggests they should push to renew a one-year payroll tax holiday Obama signed late last year. Not doing so would amount, essentially to anti-stimulus. But Obama’s been advocating a renewed payroll holiday, to no avail. Most recently, he angled to renew the holiday as part of the debt limit deal — but the final legislation did no such thing.
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at firstname.lastname@example.org.