On page A4 of Today's Wall Street Journal

"Payroll Tax Cut Idea Joins Debt Talks."

The Journal is reporting that President Barack Obama is considering pushing for extending a payroll-tax break for workers and creating a new tax break for employers. The implicit assumption around our fiscal policy assumptions are a bit complicated. We are assuming that the payroll tax passed in December goes away. Unless there is a very big cut in the 2012 budget in which case Obama goes for an extension of the payroll tax break.