October Surprise

So Hugh Hewitt asked for our best ideas about October Surpises that the Obama administration may attempt, in an effort to affect the election this November. Hugh mentioned this in the coarse of reading a Jim Geraghty post from Obi Wan Kenobi.

Yesterday and today bring articles on the administration floating a payroll tax holiday. That is my pick for a likely October Surprise. I also don't think it will, though it has some advantages and disadvantages for the Obama regime.

ADVANTAGES

• BHO can finally finally do something that isn't radical far left in nature thereby distancing himself from the Harry & Nancy Show on the Hill
• As in item above, he finally does something to help the economy instead of damage it
  
• It could be highly beneficial for the economy, freeing up income that could be spent on things people have been putting off
  
• People who work would realize gain immediately, on their next paycheck
• Politically it frees Barry up to ignore the looming expiration of the Bush Tax Cuts, as people would have an immediate "tax cut" in their hand
• It would serve to assuage the horrific changes (higher deductibles, higher employee contributions, higher co-pays) that people will begin hearing about very soon as "open enrollment" season opens
  

DISADVANTAGES

• It will come too late to help Democrats this cycle (but then does BHO really care about them anyway?)
• People may squirrel the savings away, continuing behavior noticed throughout the last 18 months, which would reduce the consumer effect such a move would "normally" result in
• Public reaction might not credit Obama with much, because of the looming medical insurance changes noted under Advantages above
• Public reaction would likely include, "See how reducing taxes helps? Now make the Bush tax cuts permanent, you idiot!"

Of all the scenarios that militate against this tax holiday are the administrations inherent antipathy to any tax cuts. Therefore, the largest danger is in the last bullet point. If people see immediate relief and the economy rebounds, then there will be great public and policy pressure to continue tax relief in some way or another. Thus, sadly, the best hope we have for a payroll tax holiday is if Obama thinks it will not work, or they find a way to do it in such a way as to actually prevent the benefits they nominally claim to be for (i.e. see health care and wall street "reform" packages). For example, they could say that the Bush tax cuts will definitely expire in January when they announce this tax holiday. But who knows?

The fact the idea has been floated on two successive days in two different venues by two different sources may indicate the White House is seriously considering it. I'm all for it, short or long term. The more money in the hands of consumers the better, now matter who benefits politically.