Tax Breaks for New Jobs Gain Bipartisan Support

Support is building in Washington for the idea of giving companies tax breaks when they hire new workers. President Obama’s economic team has been exploring the possibility for weeks, and lawmakers on both sides of the aisle like the idea of helping unemployed constituents. “There’s a lot of traction for this kind of idea,” says GOP Rep. Eric Cantor. “I’m fairly positive it would be welcomed in a bipartisan fashion.”

Under one proposal, employers would get a credit worth twice the first-year payroll tax for their new hires. The last time something similar was tried, following the '73-'75 recession, employment shot up. “It’s a pity that this wasn’t done a year ago,” says Nobel laureate Edmund Phelps, one of several big-name economists behind the idea. But naysayers say the proposal’s just corporate welfare. “Some bad ideas never go away,” says one Urban Institute researcher. (More tax breaks stories.)