Sarah Babbage

Sarah Babbage is a fall 2010 intern at the Prospect.

Recent Articles

About That Payroll Tax Holiday...

When President Obama signed the tax deal last December that extended the Bush tax cuts in exchange for a Social Security payroll tax holiday, he seemed confident it was in the best interest of the economy and the American people. “This is real money that's going to make a real difference in people's lives. That's how we're going to spark demand, spur hiring, and strengthen our economy in the new year,” he said . Six months later, economic growth is sputtering and job creation is up but unemployment remains at 9 percent . If the tax holiday was designed as stimulus, why doesn’t it seem to have helped? There are deep economic issues at play in the continued recession, but the holiday also had serious problems in its design. It was regressive, lowering all taxpayers’ contributions (which are capped at $106,000) by 2 percent, meaning the government had to give CEOs thousands in tax breaks they didn’t need. Someone earning $1 million saved $2,136 – a drop in the bucket to them but a lot of...

Lawmakers Are Moving Away From Ryan's Budget Because It's Bad

Lawmakers are now refocusing to the budget debate, with Joe Biden hosting representatives from the Democratic and Republican parties at Blair House yesterday. While it was out of the headlines, Republican uneasiness with their party’s deficit plan, Paul Ryan ’s Path to Prosperity, seems to have grown, and now many are abandoning at least parts of it, particularly Medicare. While only Sen. Susan Collins has expressed outright opposition to Ryan’s Medicare reforms, Sens. Lamar Alexander and Rob Portman , Rep. Michele Bachmann , and others have refused to give it their outright support. There were rumors Republican leadership was planning on abandoning the reforms entirely, with Paul Ryan saying he is under “no illusion” about its chances of success, but at last check, John Boehner said they stand by the plan. Why are people abandoning it? Ryan’s budget wreaks havoc on the middle class and the social safety net, taking 34 million Americans off health insurance and scaling back Pell...

Budget Gimmicks Get Their Day in Court

The Senate Finance Committee held a hearing this morning on the various budget gimmicks that Congress is considering, including in a vote on the debt ceiling. As the Prospect previewed earlier this week, the chief proposals up for debate were the Corker-McCaskill CAP Act , which reduces government spending to an arbitrary 20.6 percent of GDP, and President Obama ’s debt fail-safe trigger , which invokes certain spending cuts and tax increases if the debt-to-GDP ratio doesn’t start improving in 2014. Republican responses to the fail-safe idea, as reported by The Hill , were predictable. Sen. Jon Kyl called it “the worst possible outcome” because of its potential to raise taxes automatically. It’s odd that he can recognize the absurdity of “automatic” changes to fiscal policy, which will come into effect under unpredictable conditions in the future, when they apply to taxes, but not to spending on crucial government programs. Meanwhile, Sen. Orrin Hatch continued to push the widely...

A Test of Seriousness for Spending Gimmicks

As we enter the weeks before Congress is finally forced to vote on whether or not to raise the debt ceiling, hopes of passing a clean bill – one that lets the U.S. add to its debt without attached riders to make it also cut spending – seem all but [vanished]( http://prospect.org/cs/articles?article=the_senates_debtceiling_wild_cards ). Instead it’s [looking]( http://www.washingtonpost.com/blogs/ezra-klein/post/will_the_white_house... ) like the debt ceiling vote will either be accompanied by Sens. **Bob Corker** and **Claire McCaskill**’s spending cap (the CAP Act) or a debt failsafe trigger like **Obama** proposed in his deficit speech. Tomorrow the Senate Finance Committee will hold a [hearing]( http://thehill.com/blogs/on-the-money/budget/158239-senate-finance-will-... ) on these and other options. As **Heather** [described]( http://prospect.org/cs/articles?article=a_spending_cut_by_any_other_name ) yesterday, the CAP Act is a nightmare of political posturing and economic nonsense...

The Public Still Trusts Ryan, But For How Much Longer?

Gallup released some counter-intuitive numbers this morning in a new poll that finds that people over 30 favor Paul Ryan 's deficit plan over the one proposed by Obama , with even higher support from those over 50. This is the same Ryan plan that proposes to turn Medicare into a voucher system in 10 years, when most of this demographic will just be entering the system, increasing the average beneficiary’s costs by 40 percent. It’s also the plan that cuts Medicaid by as much as $1 trillion in the next decade and leaves the door open to Social Security reform, making it possible that these people will retire only to find they paid a working lifetime’s worth of payroll taxes for nothing. The public seems to hold a strong sense that the Republicans are better equipped to manage the deficit, with polls regularly finding more Americans trust them to set the budget. But disapproval for the actual cuts proposed in their plan tends to be in the high 70s. A recent Wall Street Journal /NBC poll...

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