Turns out there was an extra enticement that brought ex-Phillie Jayson Werth to the nation's capital. In order to stimulate Washington's sluggish baseball economy, President Obama and his nemeses (nemisi?) in the GOP leadership announced tonight a deal to reduce Werth's federal income tax over the next two years. With the slugging right-fielder slated to make $36 million playing for the Nationals in 2011 and 2012, the compromise announced last night by Obama should mean an extra roughly $1.6 million that will be borrowed from China to pay Werth -- which apparently was the factor that tipped the deal to Washington and away from the perennially contending Boston Red Sox.
One side effect of the deal is that to make the arrangement pass Constitutional muster, the offer must be extended to all Americans making more than $250,000 a year, which will cost the federal treasury roughly $100 billion -- but after the loss of home-run bashing Adam Dunn to the White Sox, Washington is willing to overpay the Chinese banks to make sure that Nats' fans know their city is serious about winning.
For the heck of it, they also decided to cut payroll taxes for regular schlubs like the rest of us.
Who better than Ezra Klein to analyze?
So is this a good deal? It's a lot better than I would've told you the White House was going to get if you'd asked me a week ago. There's some new stimulus in the form of the payroll-tax cut and the expensing proposals. The older stimulus programs that are getting extended -- notably the unemployment insurance and the tax credits -- probably would've expired outside of this deal. The tax cuts for income over $250,000 are a bad way to spend $100 billion or so, and the estate tax deal is really noxious.
And it represents a correct prioritization of stimulating the economy over reducing the deficit. It's not the most effective stimulus you could imagine: The deal amounts to the White House throwing some bad money after good.