Tax credit for hiring gaining support

WASHINGTON, Oct. 7 (UPI) -- A plan to provide U.S. employers with tax credits for adding to their payrolls is gaining wide support, Republican whip Eric Cantor said.

"There is a lot of traction for this kind of idea. If the White House will take the lead on this, I'm fairly positive it would be welcomed in a bipartisan fashion," Cantor, R-Va., told The New York Times.

The idea has support from influential economists including Nobel laureate Edmund Phelps and former Labor Secretary Robert Reich, the Times said.

"It's beautiful if it can be timed at a dire moment like this, when unemployment is way too high and appears to be going somewhat higher," Phelps said.

The same concept was used when hiring slowed after the 1973-75 recession. A study done by the American Economic Review said the policy may have prompted 700,000 of the 2.1 million new hires in the next few years.

However, some believe it is a giveaway, easy for employers to manipulate and a bonus for hiring that would have occurred, anyway.

"Some bad ideas never go away," said senior research associate Howard Gleckman at the Urban Institute. "It's just providing incentives to lots of companies that probably aren't going to make it," he said.