EDITORIAL: Payroll taxes: 'Holiday' proposal could mean more jobs

Temporarily eliminating the federal payroll tax for new hires isn't the sort of big idea the nation needs to ensure enduring prosperity. But it could help put people back to work. And with one in 10 American workers unemployed, that's reason enough to include the bipartisan proposal from Sens. Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah) in the jobs package now taking shape in the Senate.

The idea is simple - which is one of its strengths. A business that hires a person who's been out of work for at least 60 days wouldn't have to pay the employer share of the federal payroll tax for that worker for the duration of 2010.

There's a risk of Washington paying companies to fill jobs they'd be filling anyway. Businesses hire when demand makes adding workers profitable. But the payroll tax holiday should prod employers to hire sooner rather than later, in order to maximize the tax break. And time is critical for people without jobs.

Schumer and Hatch know that small-bore initiatives like this one aren't enough, given the magnitude of our economic woes. Job creation was slowing and wages stagnating years before the financial crisis pushed the nation into recession. What's needed now are big ideas and forward-looking investments in things like green technology, alternative energy, and broadband and wireless infrastructure.

Nudging businesses to hire now is important. Positioning the nation to prosper long-term is essential. hN