Bloomberg View: Two Policies to Keep From the Fiscal Cliff

Almost lost in the fiscal cliff debate is whether to extend two programs that have helped bolster the economy over the past four years by putting more money in consumers’ pockets. The payroll-tax holiday and extended federal unemployment benefits will end in January absent congressional action. Their expiration would save the U.S. about $145 billion next year—but shave about 1 percentage point off economic growth.

The U.S. economy is too fragile to withdraw support cold turkey. About 12 million people are unemployed, and 40 percent have been out of work six months or longer. The Federal Reserve expects the 7.7 percent unemployment rate to decline only slightly, if at all, in 2013.