Editor's Note: This was written before both the Senate's blocked cloture vote on the bill and the signing of the FTAs with Colombia, South Korea, and Panama. So...yeah.In a somewhat shocking turn of events, I’ve actually received a request for a column regarding the American Jobs Act. Since I’ve never received a request to discuss a topic from anyone ever, I’m inclined to go along with it. So, once again, my column on our disastrous trade policy will have to wait for another day. I’m sure you’re all quite upset. In the meantime, though, I’ve decided to do something I rarely do, and even then it usually involves debunking the insipid talking points spouted by local yokels, Faux News “journalists,” or both. I’m going to go through the American Jobs Act, word for word as listed on their comprehensive fact sheet, and discuss the actual potential impact of every move, as well as the likelihood of each aspect surviving to the end without being bargained away or watered down. There’s going to be a report card and everything; I’ll be like Greg Easterbrook minus the pretentiousness and vendettas (well, at least the vendettas). You might want to sock this one away for when you’ve got a lot of down time; this might end up being my longest column yet. You can check out the comprehensive fact sheet, which I’m using for this Dr. Jack Ramsey-style breakdown, at
http://www.whitehouse.gov/the-press-office/2011/09/08/fact-sheet-and-overview Let’s start with the opening two paragraphs:
“The American people understand that the economic crisis and the deep recession weren’t created overnight and won’t be solved overnight. The economic security of the middle class has been under attack for decades. That’s why President Obama believes we need to do more than just recover from this economic crisis – we need to rebuild the economy the American way, based on balance, fairness, and the same set of rules for everyone from Wall Street to Main Street.
We can work together to create the jobs of the future by helping small business entrepreneurs, by investing in education, and by making things the world buys. The President understands that to restore an American economy that’s built to last we cannot afford to outsource American jobs and encourage reckless financial deals that put middle class security at risk.”So far, so good. Most of this is stuff that I and many others have been saying for quite some time now (don’t believe me? Feel free to use the sidebar to check out the archive). Not quite enough blame here, but still, a good, forceful start.
GRADE: A“To create jobs, the President unveiled the American Jobs Act – nearly all of which is made up of ideas that have been supported by both Democrats and Republicans, and that Congress should pass right away to get the economy moving now. The purpose of the American Jobs Act is simple: put more people back to work and put more money in the pockets of working Americans. And it would do so without adding a dime to the deficit.”Oh, boy. I was hoping that my good vibes would last past the third paragraph. Whenever I see the phrase “supported by both Democrats and Republicans,” my first thought is always “supported by the corporate establishment.” Also, the focus on the size of the deficit in the last sentence is alarming; it tells me that the President continues to allow the Republican think tanks to control the debate and also leaves me wary that this could be yet another half-measure where two whole measures are needed. Seems like squandering initial goodwill is becoming the hallmark of this Administration (see:
US Plans To Veto Palestinian Application For Statehood At U.N.). The second sentence is solid, and the tone is a nice “my way or the highway” that’s nice to see even if it’s not likely to pervade the rest of the work, but I’m too leery of the rest to rate this any higher than average.
GRADE: C“The American Jobs Act has five key components:
Tax Cuts to Help America’s Small Businesses Hire and Grow
Putting Workers Back on the Job While Rebuilding and Modernizing America
Pathways Back to Work for Americans Looking for Jobs
More Money in the Pockets of Every American Worker and Family
Fully Paid for as Part of the President’s Long-Term Deficit Reduction Plan“We’ll tackle each one in order, but initial impressions? 1 looks like bad news, 5 looks like really bad news, and 2-4 look pretty good.
1. Tax Cuts to Help America’s Small Businesses Hire and Grow.
The President’s plan includes new tax cuts to businesses that provide immediate incentives for firms to hire and invest. These tax cuts would be available to all businesses, regardless of size, but are designed to target their impact towards the smallest businesses:
A payroll tax cut to businesses, with a focus on small employers ($65 billion in combination with the payroll tax holiday for new wages).The President’s plan will extend the payroll tax cut to firms by cutting in half their payroll tax on the first $5 million in payroll. Next year, instead of paying 6.2 percent on their payroll expenses, firms would pay only 3.1 percent. The President’s plan would provide tax cuts for all firms, with focused relief on the 98 percent with less than $5 million in payroll.If it weren’t for the word they themselves emphasized, this wouldn’t be a terrible idea. The whole issue with this comes from the choice of numbers:
the 98% of companies that have payrolls under $5 million are mostly a long way under $5 million; while cutting the payroll tax in half for them will help some, it’s not going to be a majorly substantive amount of money. Consider a small local coffee shop that only carries 10 workers, not including the owners, who help out on a regular basis. We’ll assume 4 full-time employees at roughly $27,000 a year (probably a generous estimate) and 6 part-time employees at roughly half that (probably a very generous estimate). Total payroll is $189,000 per year. The amount that company saves in a year with this program? $5,859. Not bad, but not nearly enough be truly meaningful to a business walking the thin line between success and failure. By comparison, the 2% of companies at $5 million or more are, by definition, all above $5 million and will thus get the full benefit. The savings at $5 million is a cool $155,000; now THAT’S the kind of money that could really help a small business grow and develop. Had this been targeted only to companies with less than, say $3 million in payroll, this would have the effect the Administration is looking for with the notable benefit of costing substantially less. The majority of money for this program will end up going, yet again, to the corporate interests that don’t need it.
GRADE: D+A complete payroll tax holiday for new jobs or wage increases. In addition to the 3.1% payroll tax cut for all firms, the President’s plan provides a direct incentive to encourage firms to hire additional employees or raise wages for their current employees. The plan would completely refund payroll taxes paid on added workers or wage increases for current workers above the level of last year’s payroll. To focus the benefit of this tax cut on small businesses, payroll tax relief would be capped at applying to $50 million in new wages. This tax holiday would be augmented by targeted tax cuts for hiring the long-term unemployed as well as veterans who have been out of work six months or more.Now THIS is a good idea. Wiping out the payroll tax for new hires or wage increases will put meaningful money into everyone’s pocket at a roughly equal rate. For comparison’s sake, let’s look at our coffee shop again. Business has been good, so they decide to add two more part-time employees and give everyone across the board a slight bump in pay to $28,000 and $14,000, respectively. That’s an increase in payroll of $35,000. The normal tax rate on that additional payroll would be $2,170; now, it’s $0. Coupling this with the previous tax cut now takes the total savings to $8,029, more than half a part-time employee’s salary. It’s still not a ton of money, but now it has the notable advantage of coming with a tangible benefit. Our fantasy corporation saves a good chunk of money here, too (adding $2 million in payroll would result in a tax cut of $124,000). While that again benefits the corporation more, it also means another $2 million going toward higher wages, new employees, or both; it means that the “job creators” actually start acting like it. What’s most important is that this is a legitimate incentive to bring on employees at a time where they can be at a lower cost to the company. If there’s one thing corporations and small businesses can agree on, it’s cheaper labor.
GRADE: BExtend 100 percent business expensing through 2012 ($5 billion).The President is proposing an extension of the 100 percent expensing provision that he signed into law in December 2010, which rewards firms for making investments by allowing them to deduct the full value of those investments from their tax obligations through 2012. Extending 100 percent expensing for an additional year would put an additional $85 billion in the hands of businesses in 2012. Most of this relief would be recouped by the Treasury as businesses regain their strength. Liked this idea when they instituted it, still like it now. The ability to write off all major investments in infrastructure is a huge help to small businesses. I would have added a “buy American” provision (the investment can only be written off if the asset was made in the U.S.A.), but beggars can’t be choosers. GRADE: B+
Help entrepreneurs and small businesses access capital and grow. The President’s plan includes administrative, regulatory and legislative measures to help small firms start and expand. This includes:
Changing the Way the Government Does Business with Small Firms: The Administration will soon announce a plan to accelerate government payments to small contractors to help put money in their hands faster. The President is also directing his CIO and CTO to stand-up, within 90 days, BusinessUSA, a one-stop online platform that businesses could use to access the full range of government programs and services businesses they need to compete globally. These changes were called for by the President’s Jobs Council, the President’s Export Council and small businesses across the country. Finally, the Administration supports a delay of the Bush Administration-era rule requiring government entities withhold and send to the IRS 3% of payments made to contractors.I don’t have a clue what any of this will accomplish, so I’ll withhold judgment.
GRADE: INCReducing Regulatory Burdens on Small Business Capital Formation: As part of the President’s Startup America initiative, the Administration will pursue efforts to reduce the regulatory burdens on small business capital formation in ways that are consistent with investor protection. This includes working with the SEC to explore ways to address the costs that small and new firms face in complying with Sarbanes-Oxley disclosure and auditing requirements. The administration also supports establishing a “crowdfunding” exemption from SEC registration requirements for firms raising less than $1 million (with individual investments limited to $10,000 or 10% of investors’ annual income) and raising the cap on “mini-offerings” (Regulation A) from $5 million to $50 million. This will make it easier for entrepreneurs to raise capital and create jobs.
Yikes. Can anyone tell me the last time deregulation helped anything? Anyone? Still waiting…yeah, that’s right, it hasn’t helped. Ever. Every time regulations get relaxed or eliminated, there’s a boom for a short time, followed by massive corruption, a huge scandal, and colossal expense to the taxpayers. Between
the savings and loan scandals of the ‘80s,
the energy firm deregulation of the late ‘90s and early ‘00s, and
the housing/derivative/Wall Street deregulation of the late ‘00s that CAUSED THE VERY PROBLEM WE’RE TRYING TO FIX WITH THIS BILL, there hasn’t been an example in the last 30+ years of reduced regulation resulting in anything but fraud and corporate malfeasance. I know this is smaller in scale, but it’s still asking for trouble.
GRADE: FHelping Small Businesses Compete for Infrastructure Projects: Small businesses are also a vital part of our efforts to invest in and re-build our nation’s infrastructure. In order to ensure that small firms have the tools they need to compete for and win bids on infrastructure projects, we are calling to temporarily increase the limit on SBA-guaranteed surety bonds from $2 million to $5 million.
Look, if you want to help small businesses get the venture capital together that they need, why not just make this program larger in scale and ignore the deregulation idea all together? GRADE: B
Passing Patent Reform: Small businesses are critical to developing innovative products and services. Reforming our outdated patent system will allow them to get their ideas to market faster and will help accelerate their potential to transform and grow our economy and create the jobs of the future.The patent system in this country has heavily favored corporations since the days when
Thomas Edison was blatantly stealing and patenting other peoples’ inventions every ten minutes. I have my doubts that this will do anything other than increase the stranglehold corporate interests have over the patent system. Still, if it does make it easier for small businesses to innovate and keep the rights to their innovations longer, this could ostensibly help.
GRADE: C2. Putting Workers Back on the Job While Rebuilding and Modernizing America.
Note: This section is really, really long on the fact sheet. I’ve taken the liberty of excising a few things to save space.A Helping Hand for Veterans: The President believes we have an obligation to make sure our veterans are able to navigate this difficult labor market and succeed in the civilian workforce, and that is why he is proposing a plan to lower veteran unemployment and ensure that service members leave the military career-ready:
A new Returning Heroes Tax Credit of up to $5,600 for veterans who have been unemployed six months or longer, and a Wounded Warriors Tax Credit of up to $9,600 that will increase the existing tax credit for firms that hire veterans with service-connected disabilities who have been unemployed six months or longer.
Forming a Department of Defense-led task force to maximize the career-readiness of all service members, and enhancing job search services through the Department of Labor for recently transitioning veterans.
Despite my personal issues with the name of the first tax credit (sorry,
Lynndie England Fan Club members), I’m pretty heavily in favor of this plan. I know, I know, I’ve put way too much support into tax cuts and their effects will be minimal at best. I’m not going to come out against any plan that will help take care of veterans, whose disproportionate hardship has been overlooked for too long. Veterans with legitimate qualifications to perform any number of jobs in civilian life can’t get those jobs because of arbitrary requirements (the Administration likes to reference a decorated Army medic and first-responder who couldn’t get hired as an EMT after being discharged because they didn’t have a college degree). Anything that can solve that while also helping to insure that people coming off the front lines are ready and capable of being civilian workers (for some of them, the military is the only career they’ve ever known, and the transition is not unlike what it’s like for professional athletes who suffer career-ending injuries without anything to fall back on) is OK in my book.
GRADE: A-Preventing Teacher Layoffs and Keeping Police Officers and Firefighters on the Job ($35 billion):The President’s plan will invest $35 billion to prevent up to 280,000 teacher layoffs and keep police officers and firefighters on the job.
This one depends entirely on how the money gets used. $5 billion is set aside for first-responders and emergency personnel, which leaves $30 billion for teachers and police officers. There need to be extremely strict guidelines on how this money gets used, or states (read: red states) will find ways to roll it into related-but-not-the-same projects (vouchers for private schools, helicopters that ostensibly belong to the police department but can be used to take the governor to his kid’s soccer game, etc). On top of that, whenever money is given in this way to states, there’s always a chance that someone trying to score political points (
Bobby Jindal, please pick up the white courtesy phone) will just send the money back or refuse to use it. Teacher shortages have become an epidemic and overcrowding is just as out of control in schools as it is in prisons (
Chicago’s average class size this year is now over 30). This has to be fixed properly, right now, or America will continue to fall behind intellectual powerhouses like
Turkey and Belgium.
GRADE: INCModernizing At Least 35,000 Public Schools – From Science Labs and Internet-Ready Classrooms to Renovated Facilities($30 billion): The President’s plan calls for substantial investments in our school infrastructure, modernizing and upgrading America’s public schools to meet 21st century needs. The cost of maintaining more than 100,000 public schools is substantial for already overstretched districts. The accumulated backlog of deferred maintenance and repair amounts to at least $270 billion. Schools spend over $6 billion annually on their energy bills, more than they spend on computers and textbooks combined. For children in the nation’s poorest districts, these deferred projects too often mean overcrowded schools with crumbling ceilings and a lack of the basic wiring infrastructure needed for computers, projectors, and other technology. The President’s plan will invest $30 billion in enhancing the condition ofour nation’s public schools – with $25 billion going to K-12 schools, including a priority for rural schools and dedicated funding for Bureau of Indian Education funded schools, and $5 billion to community colleges (including tribal colleges). The range of critical repairs and needed construction projects would put hundreds of thousands of Americans – construction workers, engineers, maintenance staff, boiler repairman, and electrical workers – back to work.Notable details: 40% of the money will go to the 100 largest high-need school districts (which hasn’t worked out very well for plans like this in the past); the remaining 60% will be given to the states to allocate as they see fit (uh oh); investments can also target ways to make schools better community centers, including additions to potential adult education and job training centers (not really related). As the above paragraph itself mentions, the backlog is over $270 billion. This is less than 1/9th of that. Summed up in six words: good idea, but not nearly enough.
GRADE: BImmediate Investments in Infrastructure ($50 billion): In order to jumpstart critical infrastructure projects and create hundreds of thousands of jobs, the President’s plan includes $50 billion in immediate investments for highway, highway safety, transit, passenger rail, and aviation activities – with one fifth of the funding advancing a transformation of how we finance transportation infrastructure and what we finance.Details: $27 billion to improving the highway system (big thumbs up); $9 billion to improve mass transit and an additional $2 billion to modernize passenger rail (both long, long overdue); $2 billion to modernize and upgrade airports (also overdue); $50 million for improving employment and job training opportunities for women and minorities (not really related, but still probably necessary); $10 billion for innovations in infrastructure, including $4 billion toward development of high-speed rail corridors and $5 billion for the TIGER and TIFIA programs (hell yeah!). Cannot stress enough how important this section is. If it were up to me, this would be at least double the size it is here, probably by virtue of eliminating the whole payroll tax cut. This really isn’t enough for this area, either, but I assume the President aimed low because the Republicans fought him tooth and nail on it for the stimulus package (then bitched about how there wasn’t enough money for infrastructure spending to maintain their hypocrisy levels at the required “ludicrous” state). However, because this won’t just save jobs but create many, many more (it should be noted that the 7% of stimulus money that went to infrastructure spending created over 40% of the jobs), it’s still greatly important.
GRADE: A+National Infrastructure Bank ($10 billion).To direct Federal resources for infrastructure to projects that demonstrate the most merit and may be difficult to fund under the current patchwork of Federal programs, the President is also calling for the creation of a National Infrastructure Bank (NIB), based on the model that Senators Kerry and Hutchison have championed with bi-partisan supportin the Senate. It also builds on legislation by Senators Rockefeller and Lautenberg, the work of long-time infrastructure bank champions like Rep. Rosa DeLauro and input from the President’s Jobs Council. There are details on the fact sheet, but quite frankly, they aren’t entirely clear, and what they do explain leads me to believe that it’ll end up being an even more corporate-defined version of the Federal Reserve (the NIB right now looks like what
Andrew “Crazy Old Slave Owning Indian Murderer” Jackson thought the Bank of the United States was when he destroyed it and most of the country’s economy). I’m withholding judgment for now.
GRADE: INC Project Rebuild: Putting People Back to Work Rehabilitating Homes, Businesses and Communities($15 billion):The bursting of the housing bubble and the Great Recession that followed has left communities across the country with large numbers of foreclosed homes and businesses, which is weighing down property values, increasing blight and crime, and standing in the way of economic recovery. In these same communities there are also large numbers of people looking for work, especially in the construction industry, where more than 1.9 million jobs have been lost since the beginning of the recession in December 2007. The President is proposing Project Rebuild to help address both of these problems by connecting Americans looking for work in distressed communities with the work needed to repair and repurpose residential and commercial properties. Building on successful models piloted through the Neighborhood Stabilization Program (NSP), Project Rebuild will invest $15 billion in proven strategies that leverage private capital and expertise to rehabilitate hundreds of thousands of properties in communities across the country. The basic idea is to put construction workers back to work rebuilding and repurposing foreclosed homes and failed businesses to attract either new companies, new homeowners, or property developers who want to cut down on overhead. It’s an interesting idea and a clever solution to the problem. I’m not sure how well it will work, but it’s certainly worth a shot. This idea screams “will be killed by the Republicans at first chance,” though.
GRADE: B+ Expanding Nationwide Wireless Internet Services For the Public and the First Responders, in a Fiscally Responsible Way: The plan follows the model in the bipartisan legislation from Senators Rockefeller and Hutchison in including an investment to develop and deploy a nationwide, interoperable wireless network for public safety. The plan includes reallocating the D Block for public safety (costing $3 billion) and $7 billion to support the deployment of this network and technological development to tailor the network to meet public safety requirements. This is part of a broader deficit-reducing wireless initiative that would free up public and private spectrum to enable the private sector to deploy high-speed wireless services to at least 98 percent of Americans, even those living in remote rural and farming communities. In addition, freeing up spectrum from the private sector through voluntary incentive auctions that were included in both the Rockefeller-Hutchison bill and the House-passed Budget would raise money to pay for these investments in public safety and also reduce the deficit.Meh. I’m pretty sure the recent decisions regarding net neutrality mean that this paragraph reads “We’re going to increase the availability of high-speed broadband access so companies can gouge you even more than they already do.”
GRADE: C 3. Pathways Back to Work for Americans Looking for Jobs
The President’s plan would help out-of-work Americans and their families by extending unemployment insurance to prevent 6 million Americans looking for work from losing their benefits, while at the same time reforming the system to help support programs that build real skills, connect to real jobs, and help the long-term unemployed. The President’s plan is targeted to address long-term unemployment in an aggressive, multi-pronged way, drawing from ideas about what is working from around the country and from both parties.
Here we go. Let’s see where this leads, because if the President is serious about reforming unemployment coverage and addressing long-term unemployment, this could be the biggest economic stabilizer of all.
Reform Our Unemployment Insurance System to Provide Greater Flexibility, While Ensuring 6 Million People Do Not Lose Benefits ($49 billion): Drawing on the best ideas of both parties and the most innovative States, the President’s plan will equip the unemployment insurance (UI) system to better address our current long-term unemployment challenge. In these times, the federal emergency unemployment system must offer not just a weekly check, but also an aggressive strategy to connect the unemployed to work – through reforms ranging from rigorous assessment and job-search assistance to flexible work-based uses of federal UI to smart strategies to prevent layoffs in the first place.
Details: drastically increased support for finding work for the long-term unemployed, ranging from job search assistance to referrals to training programs (good stuff); work sharing (i.e. using unemployment funds to cover lost hours, allowing companies to keep staff while still reducing payroll costs, a really excellent idea that has worked in multiple countries); “Bridge to Work” programs (programs by which the unemployed take very low-paying jobs to obtain skills and training and unemployment insurance helps cover the shortfall in their wages; not exceptional because they’re opening the door to the elimination of minimum wage, and anytime Eric Cantor is in support of an idea I have to wonder what the catch is); wage insurance (using unemployment funds to make up the difference when unemployed workers have to take much lower wages just to have a job; this idea is unbelievably important for communities where outsourcing and corporate greed have wiped out most of the good-paying manufacturing jobs); and new business incentives (allowing unemployed entrepreneurs who start their own businesses to continue to collect unemployment benefits for a time). Plenty of good ideas here. In particular, I’m a big fan of wage insurance; the majority of people who’ve gotten new jobs in the last three years have had to take far lower wages than they had at their previous position (in some cases less than half of their previous salary), which makes it even harder for those people to save for retirement. Work sharing is also a stellar idea; instead of a company with 800 workers laying off 400 of them, that company instead keeps them all, but cuts their hours in half. With work sharing, the employees not only keep their jobs, but keep most of their pay as well. The whole section screams “this will lower unemployment AND grow the economy,” but because unemployment benefits are socialism, none of this will ever pass.
GRADE: ATax credits for businesses that hire the long-term unemployed ($8 billion):The President’s plan includes a special bonus credit of up to $4,000 for firms that hire the long-term unemployed.A meaningless waste of money. This is the Adam Dunn of the bill.
GRADE: FInvesting in Low-Income Youth and Adults ($5 billion):The President’s plan for jobs and growth offers a particularly aggressive strategy to expand employment opportunities for communities that have been particularly hard hit by the recession, and that may take longer to get back on their feet due to greater income losses and smaller savings than higher-income workers. In August 2011, African Americans had an unemployment rate of 16.7 percent and Hispanics had an unemployment rate of 11.3 percent. The numbers were even worse for youth: 45 percent of youth between the ages of 16 to 24 were employed last month, including only 33.8 percent of African American youth. In fact, only 21 out of every 100 teens in low-income families had a job this past summer. Building on highly successful Recovery Act programs that provided job opportunities for low-income adults and youths, the President’s Pathways Back to Work Fund will make it easier for workers to remain connected to the workforce and gain new skills for long-term employment.This is an absolutely crucial aspect targeting one of the most underserved groups hit hardest by the recession.
The unemployment rate amongst the recently-graduated is astronomical. Most high school students are having major difficulty finding part-time work, and summer work in many communities has completely dried up, swallowed by older workers willing to take anything just to have a paycheck. Part of the problem is that many young people aren’t learning the skills necessary to fill the positions that ARE available. If this helps address the problem, then a number of birds (high unemployment, low tax revenue, issues with alleged juvenile delinquency, etc.) could be killed with one stone. Thumbs up.
GRADE: A- Ending Discrimination Against the Unemployed: Recent reports have highlighted companies that are increasingly expressing preferences for applicants who already have a job. Specifically, some companies are posting job listings that include language such as “unemployed candidates will not be considered” or “must be currently employed” or “must be employed within the last 6 months.” The exclusion of unemployed applicants is a troubling and arbitrary screen that is bad for the economy, bad for the unemployed, and ultimately bad for firms trying to find the best candidates. This is particularly true at a time when so many Americans have found themselves out of work through no fault of their own. New Jersey has passed legislation to address this practice, and members of Congress have also introduced legislation. The President’s plan calls for legislation that would make it unlawful to refuse to hire applicants solely because they are unemployed or to include in a job posting a provision that unemployed persons will not be considered. Story time! When I left my job at Walgreens after three months (long story, not going to explain here), I went full-bore after jobs that would allow me to use my degree and the considerable skills related to it. Mind you, you’re not reading the words of a slacker; I graduated in the top 1% of my class in one of the most challenging undergraduate fields in the country with a double minor and relevant work experience in the industry. It took NINE MONTHS for me to find a job, any job, that would take me, and that job ended up being in food microbiology, an area where my abilities were completely useless. Even they were leery of hiring me because I had been out of work so long (no joke, they told me this). It took another eight months of working for that company before I finally landed my current job in biopharmaceuticals. If you include the two months after graduation before I ended up at Walgreens, that’s nearly TWO YEARS AFTER GRADUATION before I ended up in my chosen field. And this is coming from someone who was well qualified for a position right out of college! What kind of chance do people looking for work in fields completely unrelated to their original specialty have? How can we expect to end the problem of unemployment when companies refuse to hire the unemployed? How many people who are well qualified for work get turned away because of circumstances beyond their control? This needs to stop NOW. I consider this law as important as the one in the health insurance reform bill eliminating discrimination due to pre-existing conditions.
GRADE: A+ 4. More Money in the Pockets of Every Worker and Family
The President’s plan would put more money in the pockets of working and middle-class Americans by providing tax relief to 160 million workers – extending the payroll tax cut passed last December:
Cutting Payroll Taxes in Half for 160 Million Workers Next Year($175 billion):The President’s plan will expand on the tax cut enacted in December by cutting employees payroll taxes in half next year. Rather than having 6.2 percent of their wages deducted in Social Security taxes, workers will pay only 3.1 percent next year. This extension will provide a payroll tax cut worth $175 billion to American workers in 2012.Oooh boy. You know that tax cut you got for this year, the one you barely noticed because it’s barely covering the cost of inflation? You get to keep that for next year, and all it costs is $175 billion that could go to something productive like further infrastructure spending or trade assistance for when the awful free trade agreements with Colombia and Panama go through. Yeah, because it’s worked so well thus far. This is the most likely aspect of the whole thing to pass; it’s also one of the five least likely to have any noticeable effect on the economy. It’s still money in the average person’s pocket, so I can’t complain too much, but come on, you can do better than this.
GRADE: D Helping More Americans Refinance Mortgages at Today’s Historically Low Interest Rates: The President has instructed his economic team to work with Fannie Mae and Freddie Mac, their regulator the FHFA, major lenders and industry leaders to remove the barriers that exist in the current refinancing program (HARP) to help more borrowers benefit from today’s historically low interest rates. This has the potential to not only help these borrowers, but their communities and the American taxpayer, by keeping borrowers in their homes and reducing risk to Fannie Mae and Freddie Mac.Won’t work. Fannie and Freddie have no incentive to help anyone pay lower interest rates because they’re on the ropes as is. Major lenders and industry leaders have no incentive to help homeowners and other borrowers refinance because it could reduce their profits to “sizable” from their current “astronomical.” Half the stuff in the last economic regulation bill hasn’t been enforced; what makes the administration think any of this will be?
GRADE: D- 5. Fully Paid for as Part of the President’s Long-Term Deficit Reduction Plan.
To ensure that the American Jobs Act is fully paid for, the President will call on the Joint Committee to come up with additional deficit reduction necessary to pay for the Act and still meet its deficit target. The President will, in the coming days, release a detailed plan that will show how we can do that while achieving the additional deficit reduction necessary to meet the President’s broader goal of stabilizing our debt as a share of the economy.And…that’s it. Really. There’s no explanation of what “fully paid for” entails. Since this was released the President has discussed raising taxes on the wealthy so that millionaires aren’t paying a lower effective tax rate than the average American (the so-called “Buffet Rule”), as well as eliminating loopholes in the tax code, ending oil subsidies, and changing capital gains rules. All well and good, but none of these got passed when it was plausible that they could be. There’s no chance that any of these, even if they somehow avoid the filibuster (a word which now brings to mind a different f-word) in the Senate, will get through Boehner The Blotto and The Norquists in the House. I’ll put any judgment on this on the waiting list, but I’m not holding my breath.
GRADE: INC One last category:
Intangibles: Since he gave the speech, the President has taken exactly the right tone with it. No more “I look forward to working with Republicans to find something we can all agree on.” No more “We have to work together so everyone’s views are represented.” Now it’s “Pass this. Now.” The wishy-washy, compromise-heavy, Great Conciliator Obama appears to be gone for the time being, replaced by the forceful, take-no-prisoners leader we thought we were getting in November 2008. THIS is the President
who saved the crew of the Maersk-Alabama by wiping out a whole ship’s worth of pirates. THIS is the President who made what might be
the ballsiest call since Truman fired MacArthur. Finally, he sounds like he’s ready to kick ass and take names. As someone’s who’s been critical of his willingness to bargain away pretty much everything in negotiations, all I can say is that it’s about damn time.
GRADE: A+ So, using a scale from 11 for an A+ to a -1 for an F, with INC being worth 4 (same as a C, since I’m assuming neither the best nor the worst), and taking an average over every category (24 in all), the overall score for the plan is a 5.7, which I’ll be generous and round up to a 6. That’s a B-, which is probably a little harsh, but those idiotic tax cuts and deregulation initiatives really hurt the score, much like they’ll hurt the economy. All told, though, the plan is mostly solid, with enough measures for actually tackling the root causes of long-term unemployment that we might finally see some progress. Also, any bill that includes major infrastructure spending will always get my approval. If I ignore my numbers I’d probably on first glance give this a B+: good, but not great.
With all that said, I don’t think there’s a chance that any of this ever sees the light of day. The Republican Party, and in particular their Tea Party splinter cell, have no vested interest in seeing anything get better for anyone. They’ve outright admitted their primary goal is winning the next election.
The Senate Minority Leader actually said that the main legislative goal of the Party until after the 2012 election is to do everything possible to prevent Obama from getting re-elected. There’s no benefit for them in helping the country recover (you know, beyond the whole “America being successful and not a third-world banana republic” thing); in fact, they believe anything that would keep people out of soup kitchens might help the scary black man stay in charge. I’m disgusted by their lack of common decency. I’m appalled by their indifference to the suffering of 98% of America. I’m bewildered by their willing whoring of themselves to the Kochs, Goldman Sachs, and Grover Norquist. Most of all, I’m speechless as to how, despite the self-serving transparency of it all, the American people are more than happy to keep putting these people in office.
Remember that when this doesn’t get through Congress, America. You sold the soul of this country for Reagan’s bag of magic beans. You forsook the lives of your sons and daughters to line the coffers of Halliburton, Blackwater, Goldman Sachs, Chase, and Exxon. Even after you saw the damage being wrought by this hideous farce, you kept right on going, feeding the madness because the illusion of wealth allowed you to acquiesce to becoming a slave to the oligarchy.
In the end, you brought this on yourselves.
Until next time, do what you can to help this pass. I can’t imagine your “elected representatives” will give a damn what you have to say, but if enough people care, they’ll have to do something. They can’t ignore all of us forever.
Right?
