The short-term tax deal, emphasis on ’short-term’

Opinions on the tax deal announced last night by President Obama are all over the place. As Cato’s Dan Mitchell points out, where you fall on the deal depends on where you stood and what you expected beforehand.

I’m examining the deal in this light: Given the midterm election results, I didn’t expect a “permanent” resolution on these matters. Most policy decisions, whether about taxes or other subjects, are going to be made with a two-year time-frame in mind. For better or worse, we will probably get short-term policy patches to get us to 2012, and then in 2012 voters will be given competing ideas about where we should go afterward.

If you start from that perspective, the deal is OK.

That’s because the biggest flaws in the plan have to do with timing. From the private sector’s perspective, a two-year extension of current tax rates and a one-year payroll-tax “holiday” are better than a tax hike and no holiday — but only slightly better. This deal probably would have been more effective in terms of economic growth and jobs if it had been enacted back in 2008 or even early 2009 (assuming the time-frames would have been adjusted in kind — e.g., the tax-rates extension still would have gotten us to 2012).

There is some added certainty now, but only temporary certainty — which isn’t much certainty at all. And regulatory uncertainty — about health-care reform, about financial-sector reform, about EPA-imposed carbon restrictions — still has to be addressed. But at least they did no harm to the economy.

A one-year payroll-tax holiday might be a winning idea if you think we are one year away from the economy hitting its stride. Maybe we are, maybe we aren’t. But if most employers think we aren’t, then I’m not sure this change will have much of an effect on jobs. The fact that the 2-percentage-point reduction is only on the employee’s side of the tax further limits the policy’s effectiveness; in essence, this is a different packaging of the “Making Work Pay” tax cut, which I’ve argued before was not the most effective type of tax cut because it doesn’t change anyone’s incentives to hire or otherwise expand their business.

The “pay fors” for these policies will be determined when the next Congress convenes. Republicans who campaigned on the deficit/debt issue will be under pressure to find spending cuts to offset the costs of this deal.

All that said, here’s a scenario in which we get something more than a policy patch over the next two years — and in which this new deal helps us get it.

Maintaining the status quo on taxes might make it easier to have a debate between the president and congressional Republicans on the deficit-and-debt-reduction plans that have been dribbling out over the past few weeks, such as the Simpson-Bowles plan. At least this deal limits the political noise that would have come if either the president or the GOP felt like it entered the debate coming off a big tax loss. For such a debate, a two-year time-frame is better than one year or no years.

We may see reluctance from each side to give the other a political victory (and to take some political defeats along the way), and we may see congressional Republicans simply adopt the parts of the various plans that they like as they write budgets over the next two years. But a solution would have been more difficult on shifting ground.

– By Kyle Wingfield

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57 comments Add your comment


December 7th, 2010
11:24 am

I do not expect to see much in the way of job growth as a result of this stimulus plan. And it is a stimulus plan from the view of the White House. Obama gets his second stimulus plan.

My problem with this compromise is that we are once again borrowing money to give tax payers a tax cut. There has been a lot of talk about the deficits and the national debt. But that is all, just talk.

Now for 30 straight years we have done the same thing over and over and over. And we have decided to do it one more time. “Tax cuts always result in job growth” is the theme we have heard for 30 years. And for 30 years Net Job Growth has been steadily going down.

But we have had our tax cuts.

And we have our $13.8 trillion National Debt.

As Charles Dickens had Tiny Tim say: “God bless us, every one!”


December 7th, 2010
11:32 am

I’m sure you read the cost reducing ideas in the deficit commissions report . It will be awhile before we have anything resembling certainty . Seeing the current trend in lack of give & an unwillingness as a society to take our medicine any sort of certainty might never come .


December 7th, 2010
11:36 am

“Regulatory uncertainty” is the elephant in the room, and probably has more bearing on “job creation” than short term tax code changes.

But then again nothing is really “permanent” except lunacy in Washington and the national debt.


December 7th, 2010
11:42 am

This deal probably would have been more effective in terms of economic growth and jobs if it had been enacted back in 2008 or even early 2009…There is some added certainty now, but only temporary certainty — which isn’t much certainty at all. And regulatory uncertainty — about health-care reform, about financial-sector reform, about EPA-imposed carbon restrictions — still has to be addressed.

Bull. That uncertainty argument was always a right-wing/media talking point with no basis in fact. Republicans were not and are not concerned about certainty. If they were, then they never would have passed a tax cut containing an expiration date—as Dick Cheney did when he “rammed these cuts down our throats” with his tie-breaking vote in the Senate. If Republicans are so concerned about certainty, then they could, for example, stop talking about repealing the Affordable Care Act and agree to permanently extend the middle class tax cuts (something they oppose because they like being able to hold the middle class tax cuts hostage in exchange for unpopular tax cuts for the rich).

In addition, when Kyle argues against tax cuts for workers (i.e., “Making Work Pay” and payroll tax cut) “because it doesn’t change anyone’s incentives to hire or otherwise expand their business,” he’s arguing on behalf of Bush’s failed trickle-down economics. Of course, when working people spend the savings arising out of such tax cuts, then business has more customers and, contrary to Kyle’s assertion, more customers incentivizes business to hire and expand.


December 7th, 2010
11:57 am

CJ needs to read a few books on planning for economic growth.

Kyle Wingfield

December 7th, 2010
11:59 am

CJ: No basis in fact, unless you talk to employers.

As for the effectiveness of CJ’s favored demand-side policies, check out this chart:

This has been the most jobless “recovery” of the post-WW2 era, thanks in part to the ineffectiveness of the demand-side spending and demand-side tax cuts.


December 7th, 2010
12:17 pm

Hot Air’s chart is disputes a straw-man argument: “It demonstrates the folly of the Obama administration’s insistence that we have been experiencing a recovery and any sort of significant growth in job creation.”

Of course, the Obama administration doesn’t “insist” that we have been experiencing “significant” growth in job creation. Again, the right is creating their own reality.

On the other hand, the CBO, among others, has reported out that Obama’s “demand-side policies” saved millions of jobs that would otherwise have been lost as a result of Bush’s and Greenspan’s, well, supply-side policies.

“The unemployment rate, currently 9.6 percent, would have been between 10.4 percent and 11.6 percent without the Recovery Act, the CBO said.”

Kyle’s head would explode if he were ever to come out of his state of denial, but the stimulus worked.

left wing

December 7th, 2010
12:38 pm

At $900 billion, it’s larger than the stimulus package (which you and republicans hated). Also, none of it is paid for.

The breakdown I saw said that the Bush tax cut part of this accounts for about $458 billion. Another $140 billion for the AMT fix. Another $80 for the estate tax. None of which should be counted as ’stimulative’ as the Bush tax cuts are already inplace (no change there), and I can’t see how the estate tax could be considered stimulative. So . . . doing math . . . . That leaves about $220 billion for the 2% reduction in the payroll tax and the various other tax credits.

I don’t see how we could get much stimulus from that.

Also not a fan of a 2 year extention of Bush’s tax cuts because, if you’re a believer in Milton Friedman (not me, per se, but I do read a lot), you know that “uncle Miltie” believed that short term tax breaks have no stimulative effect, as (particularly true in upper income groups) because they are viewed as temporary, they get saved rather than spent.

So no, I’m not a fan of this.

This has been the most jobless “recovery” of the post-WW2 era, thanks in part to the ineffectiveness of the demand-side spending and demand-side tax cuts.Kyle

The demand-side spending was w-a-a-a-a-y too small. Of the $878 billion, a third was tax cuts and a third is long term infrastructure. Only about $350 billion was actual demand-side spending, and even that was broken over 2 years. How much effect should $175 billion have on a $14.5 trillion economy?


December 7th, 2010
12:42 pm

So this will cost more than the last stimulas, how that deficit strategy working t-reps? Feel like fools yet?

Rafe Hollister

December 7th, 2010
12:42 pm


The stimulus worked about as well as Barry’s home loan mortgage adjustment program. Do not remember the Misnomer that was used to describe the law.


I agree that the temporary nature of Obama’s Tax Extention for the Wealthy, probably is its achilles heel. The Repubs gave away too much to get the deal. I know all the liberal pontificators are upset with Barry, but the Repubs could have steam rolled him if they were of the mind. They should have called his bluff and let the cuts expire until they had control of the House and a larger portion of the Senate. Their hand would have been much stronger, plus they could have argued that Barry was trying to add to the debt, with his add on benefits.


December 7th, 2010
12:47 pm

Why is this so hard? Our biggest, by far, issue right now is the US Debt. Period. We will all be screwed if we don’t get that under control. We need to raise taxes and reduce spending. There is no middle ground. I’m a father and homeowner, but the following are my suggestions:
- End both wars
- Repeal the child and mortgage tax credits
- Raise the SS age (and eventually phase it out)
- Term limits
- Balanced Budget Amendment, starting in 2012.

Nothing other than radical change will change the inevitable radical decline of the US.


December 7th, 2010
12:58 pm

“This deal probably would have been more effective in terms of economic growth and jobs if it had been enacted back in 2008 or even early 2009…There is some added certainty now, but only temporary certainty — which isn’t much certainty at all. And regulatory uncertainty — about health-care reform, about financial-sector reform, about EPA-imposed carbon restrictions — still has to be addressed.”

I’m not buying that one either…. So, company’s that are at capacity with their current workforce are not going to hire any new employees because they are too concerned with what new EPA regulatioins are going to be proposed? Or, the company is not going to hire needed workers because the rules regarding healthcare might change? (shocker-haven’t rules like this changed with the wind anyway?)
I’m sure they would rather just not sell as much then worry about scary regulations.


December 7th, 2010
1:11 pm

Instead Face, republicans are comfortable adding $700 billion to the deficit over 10 years (mote than the healthcare bill). It’s so obvious that republicans and Kyle care nothing about the deficit as long as the money goes to the rich. Tax cuts were an epic fail during Bush’s reign and doubling down on them will provide the same result. No true fiscal conservative concerned about the deficit would be in favor of this.


December 7th, 2010
1:13 pm

I meant Rafe, not Face.

JF McNamara

December 7th, 2010
1:20 pm

Congrats, we financed additional unemployment benefits by giving another tax cut… It’s a win-win for both parties, though. Both could make it rain money to their bases even thought it goes directly against the “referendum of fiscal responsability” we just had.

The more things change, the more they stay the same.


December 7th, 2010
1:26 pm

“The fact that the 2-percentage-point reduction is only on the employee’s side of the tax further limits the policy’s effectiveness; in essence, this is a different packaging of the “Making Work Pay” tax cut, which I’ve argued before was not the most effective type of tax cut because it doesn’t change anyone’s incentives to hire or otherwise expand their business.”


Kyle are you saying tax cuts don’t work when they are for consumers?

The only thing that creates jobs is increased demand for goods and services by consumers. The U.S. economy is driven by consumers right?

How is additional disposable income in the hands of consumers a bad thing?

What’s your grand plan to increase hiring?

Robbing Peter to pay Paul does not last forever at some point Peter will show up.

Thurston B. Howell III

December 7th, 2010
1:27 pm

Ahh Magoo….you’ve done it again.


December 7th, 2010
1:39 pm

The payroll tax holiday will be much better at job creation than the Making Work Pay or extensions of the top rates. The main drivers of new hiring will be start-ups and rapidly expanding small businesses whose owners are paying both halves of the payroll taxes (self-employment tax) and are pouring their earnings into growing their businesses so avoiding income taxes. It is about time those who keep crying crocodile tears over the small businessmen actually did something to help them.

Now if we could get the Republicans to stop filibustering the Democratic bill to remove the 1099 filing requirement and get our newly elected state leaders to establish the health care exchange so small business people can have some peace of mind on health insurance, maybe we will be in position to grow.

Rafe Hollister

December 7th, 2010
1:40 pm


That 700B number was the cost of extending the tax cuts to people making over 250,000 over TEN YEARS. Actually it is costing $140 Billion for a two year temporary program. Why are you so upset about that portion of Obama’s Tax Extention for the Wealthy compromise. What about the other $760 Billion that he is spending.

You should be mad at Barry, he is the one who cobbled this monstrosity together. He previously said the Bush Tax Cuts for the wealthy were unwise and now he extends them, doesn’t say much for consistency.

Kyle Wingfield

December 7th, 2010
2:16 pm

CJ: Forget the arguments, straw men or not. Just look at the chart, which is based on pure employment data: We are seeing the flattest job growth of any recession since WW2. That’s the point.

As for your CBO reference — yawn. Until the CBO uses a methodology for measuring the stimulus besides the same Keynesian multipliers used to predict the effects of the stimulus beforehand, these estimates aren’t worth much.

OTOH, a new study from the San Francisco Fed, which looked painstakingly at the effects of the stimulus on a state-by-state basis, instead suggests “that though the program did result in 2 million jobs “created or saved” by March 2010, net job creation was statistically indistinguishable from zero by August of this year. Taken at face value, this would suggest that the stimulus program (with an overall cost of $814 billion) worked only to generate temporary jobs at a cost of over $400,000 per worker. Even if the stimulus had in fact generated this level of employment as a durable outcome, it would still have been an extremely expensive way to generate employment.”

That commentary on the study comes from here:

The study itself is here:


December 7th, 2010
2:21 pm

Short-term thinking is one of the main reasons our Country is in such a mess now. The “I want it now” mentality of Business and Politics as opposed to long-tern planning is surely leading us down a very bad road. Only when our corporations are led by principled people and our politicans are people of real quality will there be any change in this.

Kyle Wingfield

December 7th, 2010
2:24 pm

j: If you want to incentivize hiring, how about providing incentives to — oh, I don’t know — people who do the hiring? That at least gives them something predictable to work with. When you throw money out of a helicopter, which is essentially what we’re talking about here, no business or employer can predict how much additional revenue they’re going to get.

As for whether the payroll tax holiday should be directed toward employees or employers (setting aside its temporary nature), I recommend Greg Mankiw’s comments here:


December 7th, 2010
2:38 pm

This is such a disappointment.

Why not compromise?

Democrats wants everyone’s taxes the same except those making over $250,000. Republicans want everyone’s taxes the same across the board.

The obvious compromise was to move the figure. Everyone’s taxes stay the same up to $500,000 for example.

If they had reached this agreement, we would have closed some of the revenue gap and they would have shown us all that they can compromise and get things done.

JF McNamara

December 7th, 2010
2:40 pm


Why are we incentivizing anything? Isn’t that just manipulating the free market? Both of these items are just giving away money and you know it. We aren’t going to get any incremental growth at all from this.

How about calling out both sides for politics as usual?


December 7th, 2010
2:49 pm


You link to the strangest places.

For example, your e21 folks wrote, “On the tax cut portion of stimulus legislation, we have highlighted research by Claudia Sahm, Matthew Shapiro, and Joel Slemrod that drew on survey data suggesting that only 13% of households reported higher spending levels due to the one-time tax cuts in the fiscal stimulus. This casts doubt on the models used by the CEA and the CBO to assess the impact of ARRA, and on various private forecasting models that relied on the same set of assumptions.”

Are you laughing? You should be. Because in “a New York Times/CBS News Poll last month, fewer than one in 10 respondents knew that the Obama administration had lowered taxes for most Americans….Actually, the tax cut was, by design, hard to notice. Faced with evidence that people were more likely to save than spend the tax rebate checks they received during the Bush administration, the Obama administration decided to take a different tack: it arranged for less tax money to be withheld from people’s paychecks…They reasoned that people would be more likely to spend a small, recurring extra bit of money that they might not even notice,…”

e21’s comment above “casts doubt” on their integrity when it comes to economic commentary.


December 7th, 2010
2:56 pm

By the way, Kyle, you wrote, “OTOH, a new study from the San Francisco Fed,…”

In fact, the study you linked to, written solely by Daniel J. Wilson, had a disclaimer: “The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System.”

Finn McCool

December 7th, 2010
3:13 pm

We are seeing the flattest job growth of any recession since WW2. That’s the point.

And the last 10 years? Where was the job growth during that time period? The tax cuts were in place during that period and we had the slowest jobs growth since WW2.

What tax breaks the wealthy don’t throw into the stock market (casino) they will use to create more jobs in India and Indonesia.

Finn McCool

December 7th, 2010
3:14 pm

Good catch, CJ. But what do you expect from someone who thinks Heritage Foundation puts out objective studies.


December 7th, 2010
3:30 pm

The tax cuts to the rich didn’t help the economy since they were first given out. That’s a fact whether you are man enough to admit it or not (methinks NOT!). As Warren Buffet put it, rich folks will always use that excuse but the reality is that it doesn’t translate into jobs. It won’t this time either. You are all about deficit cutting until it comes to this. You are all about hypocrisy.

LtCol Razorback,

December 7th, 2010
3:40 pm


What kind of lame-brained idea is that? “Raise the age for Social Security and eventually phase it out”? You must assume that everyone is going to live forever! Why should I pay MY money into anything, with no expectation of ever getting it back again?

But on further thought maybe you have something. But it would look more like this:
• Pay every living contributor into Social Security back the full amount they paid into Social Security.
• Stop all future payments into Social Security .
• Kill the Social Security Program completely.

Kyle Wingfield

December 7th, 2010
3:49 pm

CJ: I’m not sure what point you’re trying to make in comparing the two surveys. But regarding your big “discovery” about the disclaimer in the Fed report: That’s a standard disclaimer in Fed working papers. It doesn’t signal that this particular report is of less importance, or is less official, or is less accurate, than others.

If you’d like to quibble with Mr. Wilson’s methodology and findings, be my guest. But your 2:56 comment is a pretty lame attempt to discredit his study.


December 7th, 2010
3:51 pm

Herman Cain is considering running for president. If he runs, he will be elected & all of our problems will be solved. He will be the best president in the history of our country.

Obfuscation Station

December 7th, 2010
4:16 pm

As per usual, here is another right-wing mouthpiece telling you that failing to extend the tax cuts equals a tax hike. No, sir. The tax cuts were not permanent. Were they? We have all known that these tax cuts weren’t permanent. It’s discussed frequently. Thus, they were set to return to pre-cut levels. But you and your type continue to ignore this fact. Instead, you just obfuscate.

You also ignore the fact that the cuts were given in the first place to stimulate the economy and create jobs. To paraphrase your party’s new leader, Sarah Palin, “how’s that going for ya?” Nearly a decade of Bush tax cuts… and we wound up with one of the worse job creation eras in America’s history. Spin it however you want… the facts are plain and clear.

What makes me laugh is the sheer number of Americans you’ve convinced that they are middle class. When they are no more than a few paychecks away from being in deep s@#$. And yet they get in line behind ignorant rhetoric like yours above.

But let’s hope you right-wingers are right. And as Cynthia Tucker puts it… let the jobs rain down! I’ll GLADLY eat my words if they do.

Meanwhile, the America that spoke so clearly about fiscal responsibility in the last election – take that! Even less money for the common good! Stock tip for ya… start buying up all security/safety companies you can find. There’s only so much more the hungry and jobless are going to tolerate before they take action into their own hands. It’s that “C.W.” that no one wants to talk about – but is most certainly on its way with continued Republican leadership. Get ready.

Sid Farcas

December 7th, 2010
4:19 pm

Folks, it all comes down to spending cuts. The tax cuts will work if these thieves in DC will stop spending like they own every dollar in the US. They may think they do but, the American people told them differently in the last election. Tax cuts + spending cuts = a stimulated economy.

Obfuscation Station

December 7th, 2010
4:23 pm

You want to stop spending?

Total Cost of Wars Since 2001

Question Authority

December 7th, 2010
4:25 pm

Medicare is hopelessly bankrupt as is Social Security. The sooner we give everyone a holiday from the horrible waste of 15% of everyone’s pay (employer and employee theft), the sooner our economy will have a chance to recover. These are both unsustainable programs that were sold as lies, continue to be sold as lies, and are together sitting on nearly 100 trillion in unfunded liabilities (including the drug benefit from the “conservative” Bush administration).

You are right, a 2% cut for employees does nothing to the address the costs to the employer which are really just the cost of having an employee. Further, temporary solutions just extend the regime uncertainty we have been facing for the past two years.

It was nice to see the extension of some aspect of the death tax exemption. At least we won’t see quite so many people committing suicide or pulling plugs to avoid next year’s death tax increase (don’t think that such a thing will happen – you are naive).

Overall about all you can expect from the scum who infests DC. The greatest disaster will be the extension of the unemployment for 13 more months. Just another delay in the inevitable while taking more and more from the productive sector that is already struggling.

Sid Farcas

December 7th, 2010
4:30 pm

Yeah, I want to cut spending. Is the war your only point spending cuts?

Sid Farcas

December 7th, 2010
4:31 pm

And by the way, I said cut not stop. Do you stop spending in your own house when times are tough? No, you don’t and you can’t, but you cut where it is necessary.

Obfuscation Station

December 7th, 2010
4:40 pm

Sid – Call me crazy, but I think $1.1 billion is a pretty big point. Especially for needless, fruitless and baseless wars.

Thanks for correcting my use of “stop” instead of “cut.” I actually did mean reduce spending. But thanks for pointing out the obvious error.


December 7th, 2010
4:51 pm

The deal sucks. the only thing it achieves is a major political victory for Republicans and a minor victory for unemployed workers — 13 more months of benefits. Repubs get to say they forced Obama to cut a deal and they get to keep milking the issue for the next two years in the run up to the Presidential election. In the meantime, there is no indication that Republicans are ready to deal on other major policy efforts that could get down now — immigration reform (the Dream Act); New START treaty ratification; and repeal of the archaic, unconstitutional, and counter-productive Don’t Ask Don’t Tell law.


December 7th, 2010
4:53 pm

Not to mention, it does not do much for an economy (both employers and unemployed workers) that is supposedly craving regulatory certainty. Will I be able to pay my rent if I don’t get a job in the next year .. I don’t know. Will I be able to hire someone long term based upon the tax savings I get out of the extension of the Bush tax cuts … I don’t know.

Some People are stupid

December 7th, 2010
4:54 pm

Wait, I find this so funny.
Did Kyle argue against demand side tax cuts. In a demand driven economy…so tax cuts to those who spend money are bad? now I run a business, if I get a tax cut, why would I expand with no demand. Also, all business owners are uncertain as to the amount of revenue they are gonna bring in. That’s what makes the whole uncertainty argument kind of funny. When you start a business, you aren’t certain it’s gonna be a success. Year over year, you aren’t certain about your revenues and expenses, but all of a certain I need to be certain about my tax rate.
Then he said the stimulus created net zero jobs, but disregarded the Bush Tax Cuts created net zero jobs as well..

PLease tell me how you incentivize hiring besides getting an increase in demand. I would love to hear this.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

December 7th, 2010
4:57 pm

All that dummycrat huffing and puffing over tax cuts and then the Republicans blew their house down, hahahaha, just sayin…

JF McNamara

December 7th, 2010
5:02 pm

“Medicare is hopelessly bankrupt as is Social Security. ”

This simply isn’t true. We can make small changes to fix social security. We just won’t do it. Its not “hopelessly bankrupt”


December 7th, 2010
5:17 pm

tax cuts for wealthy who i doubt that their sons and daughters are fighting in an unpaid for war….true patriots! give em their precious cuts…and let the lower economic classes fight the war a la dick cheney…..great americans

left wing

December 7th, 2010
5:45 pm

Obfuscation Station Your $1.1 billion doesn’t include all of the medical costs these soldiers are going to incur over the next 40 years. I bet the $1.1 billion doesn’t include replacing the military equipment (all the wear & tear on the tanks, planes, et al). I bet your $1.1 billion doesn’t include “black ops” costs from the CIA, etc.

And that’s just money. There’s no comparing money to the grief of families that lost sons/daughters/fathers/mothers over in Iraq or Afghanistan.

These wars are much more expensive than $1.1 billion.


December 7th, 2010
6:01 pm

Cut federal spending, cut unemployment benefits back to 52 weeks maximum, set in stone income tax rates for ten years, and defeat all federal elected officials in the 2012 elections, only one term House members could be exempt if they have actually and demonstratively pursued the first three suggestions.


December 7th, 2010
6:11 pm

You can pay me now, or you can pay me later. T-reps prefer later, let the grandkids pay the bills – is there a change of heart here ? You folks got played like fiddles. Boy what a republican will do to give a rich man another dollar….

Get Real

December 7th, 2010
6:15 pm

Get a life CJ or move to Europe as you may be happier there…

Lt. Dan

December 7th, 2010
6:16 pm

I am disappointed that the GOP caved in and agreed to extend unemployment welfare benefits for another 13 months. So much for 26 weeks; that’ll be a total of THREE YEARS.

The money is not there to fund this; it’ll just get heaped onto the federal deficit. And at this point we’re paying people not to work. The recession is over, employers are hiring. What happens at the end of 13 months, another extension? Or will it become a permanent lifetime welfare entitlement?