“It looks to me like these are bargaining chips,” says Pete Davis of Davis Capital Ideas, which advises Wall Street firms. “Even most Democrats had given up on the prospect of getting the payroll tax cut extended.”
Mr. Davis considers the odds of most of the stimulus proposals passing Congress “very low.”
What's needed most, say others, is just buckling down and negotiating an end to the fiscal cliff. “Cancelling the fiscal cliff is economic stimulus,” says Stan Collender, a budget expert and partner at Qorvis Communications in Washington.
If Obama's stimulus were passed, however, here is a look at the impact the four elements might have.
Social security payroll tax cut
The largest chunk of the Obama plan is the extension of the payroll tax cut. This is the money that comes out of an individual’s paycheck as a contribution to Social Security. Two years ago, in an effort to stimulate the economy, Congress decreased the individual contribution from 6.2 percent to 4.2 percent. The employer’s contribution of 6.2 percent remained unchanged.
The Obama administration estimates extending the cuts would cost the government as much as $115 billion in revenue.