Kevin Williamson argues against Mitch Daniels' idea of a payroll tax holiday and I must say I agree with him. There was a time I was agnostic about the wisdom of a "timely, targeted, temporary" stimulus program. It seemed worth the risk of the extra debt, if the stimulus could significantly moderate and shorten the recession. A payroll tax holiday seemed like exactly the right way to go (if you were going to go the stimulus route), but that isn't what we got. Now, almost three years into this lousy economy, another government attempt to prop up demand doesn't make much sense to me. The good news is that after the failure of the Obama stimulus, Cash For Clunkers, and the temporary homeowners tax credit, the public might be ready to turn away from quick fixes and toward an agenda that can plausibly offer a stable policy environment for investment and sustained, broadly (if unevenly) rising living standards.
On the other hand, I think Daniels' idea of pushing Congress to grant the President an impoundment power makes both electoral and policy sense. Campaigning and the legislating on specific budget cuts is difficult because of the problem of concentrated benefits and diffuse costs (cough, ethanol subsidies, cough.) That doesn't mean that there aren't tens of billions of dollars in the federal budget that could be impounded with the vast majority of voters a) not noticing the money wasn't spent and b) being unmoved at the consequences of the money being unspent. The problem is creating an incentive system in which the unorganized majority that does not benefit from this spending can be rallied against the well organized interests which are well placed to push for spending within congressional electoral and appropriations processes. The impoundment power gives the President (if inclined) the ability to rally the general interest against particular spending interests.
But why would Congress grant the President this power? Partially because it would be in the interest of individual members of Congress to do the granting. Giving the President the power to impound wasteful spending could be a very popular issue. Fiscally conservative members of Congress would want to grant the power because it would be a tool to restrain spending. It would also allow them to plausibly argue in favor of spending restraint without having to go through long lists of spending cuts that induce rage in the spending interests and mego (my eyes glaze over) in everyone else. More opportunistic members of Congress (especially Republicans) might be convinced to support granting the impoundment power because campaigning on the issue might help the Republicans win congressional majorities and the chairmanships that go with majority status. Supporting impoundment might also help Republicans of suspect conservatism avoid embarrassing primary defeats. Impoundment wouldn't be a substitute for a poltic and relevant agenda on taxes, health care and entitlements, but it could play a part in shifting our electoral politics in a more limited government direction and bringing the budget under control.