Short Highlights of Obuma's Jobs Plan

[Warph]

Obuma unveiled his jobs package last night to a joint session of Congress. 
Here are the main provisions of the $447 billion plan:

http://www.sacbee.com/2011/09/08/3892951/a-look-at-expected-provisions.html

-EMPLOYEE TAX CUTS. A deeper payroll tax cut for all workers. Congress in December cut the payroll tax, which raises money for Social Security, from 6.2 percent for every worker to 4.2 percent, for all of 2011. Obama's proposals would cut that tax even further – to 3.1 percent – for all workers in 2012. The tax applies to earnings up to $106,800. The estimated cost is $175 billion.

- EMPLOYER TAX CUTS. A payroll tax cuts for all business with payrolls up to $5 million. Obama's proposal would cut the current 6.2 percent share of the payroll tax that employers pay to 3.1 percent. As with employees, that tax applies to annual employee earnings of $106,800. The White House says 98 percent of businesses have payrolls below the $5 million threshold. In addition, Obama proposes that businesses get a full payroll tax holiday for additional wages resulting from new hires or increased payrolls. The estimated cost is $65 billion.

- PUBLIC WORKS. The president proposes spending $30 billion to modernize schools and $50 billion on road and bridge projects. He also calls for an "infrastructure bank" to help raise private sector money to pay for infrastructure improvements and for a program to rehabilitate vacant properties as part of a neighborhood stabilization plan. The estimated total cost of all those programs is $105 billion.

-UNEMPLOYMENT BENEFITS. If approved by Congress, the proposal would continue assistance to millions of people who are receiving extended benefits under emergency unemployment insurance set up during the recession. That program expired in November but Congress renewed it for 2011. If not renewed again, it would expire at the end of this year, leaving about 6 million jobless people at risk of losing benefits. The president also wants to spend extra money on states that help long-term unemployed workers though training programs. One model cited is a Georgia program that lets people receiving unemployment benefits obtain job training at a company at no cost to the employer. The estimated cost is $49 billion.

-LOCAL GOVERNMENT AID. The ailing economy has forced state and local governments to lay off workers. Money that states and municipalities received in the 2009 stimulus package has been running out. Obama proposes spending to guard against layoffs of emergency personnel and teachers. The estimated cost is $35 billion.

-EMPLOYER TAX CREDITS. The president proposes a tax credit of up to $4,000 for businesses that hire workers who have been looking for a job for more than six months. The estimated cost is $8 billion.

-EQUIPMENT DEDUCTION. Wary of imposing a burden on business, Obama wants to continue for one year a tax break for businesses, allowing them to deduct the full value of new equipment. Previously, companies could only deduct 50 percent of the value. The president and Congress in December negotiated that provision into law for 2011, but it is set to expire at the end of this year. The estimated cost is $5 billion.



Lots of reliance on tax cuts.  I thought that was a Republican tactic that  Democrats scorn in their crusade for new revenue.  Isn't all this help for business what Democrats usually mock as "trickle down economics" and help for the rich?  There is, of course, lots of government spending of money that we do not have.

Do you think this will get Americans working again?

.....Warph

[Patriot]

No.

Does it seem self defeating to cut the very employee/employer taxes that fund the financially hemorrhaging Social Security & Medicare programs?  Almost half of this plan does just that.  Unintended consequences abound in this one.

Unemployment benefit extensions, while definitely critical to the unemployed, do nothing to create jobs, increasing the incentives not to seek employment and force a large segment of the unemployed population to adjust and become used to a lower standard of living than they might have if fully employed.  In short, it helps create an increasing dependency on government and will probably increase costs to businesses through increased employer 'contributions (taxes) to both state and federal unemployment insurance funds. 

Public works projects?  Sounds like more FDR mirroring.  Short term fix.  And in this case, aimed more at benefiting O's union cronies.  Remember, public sector union membership represents only about 7% if the US workforce.  Where's the work for the other 93%?  Looks like a perverse form of trickle down economics.  Inject money at union labor level, rather than at the employer level through tax relief, and it will somehow trickle out to the rest of the economy.  Don't think it will help.

Local government aid.  Big state government being fed by bigger federal government & helps keep government union jobs (read: union payback).   Nuff said.

Employer tax credits are great.... IF a business is making enough to hire new help and IF the employer has enough before tax earnings to make the credit helpful.  Why not just reduce the overall business tax rate, thereby giving the employer more to work with AND creating incentives for business to repatriate offshore money/labor?

In short, this 'plan' is just more fancy footwork and "too much government 2 step".  But sadly many repubs may buy into it, because it 'sounds like' tax reduction.  And the feds will still look to 'pay' for these cuts, meaning replacing any lost revenue.  No, this is just more government control masked as tax cuts.  What is it about LESS government that politicians don't get?

[Diane Amberg]

Maybe, just a little. The companies that went overseas don't care because they aren't here any more, but little businesses might be helped somewhat. Some medium sized businesses have learned to be more efficient and make do with less.They are doing well with the employees they already have and aren't hiring.
  The Gov't needs to pay back the money "borrowed" from SS. 
Some banks are still hoarding money and not loaning it out. Some are so full of money they don't know what to do with it all. BoA is actually "charging" to put money in, (by paying less interest) because of the FDIC fees. Depositors are effectivley paying for their own FDIC insurance.The only folks getting loans are those with huge safety nets and no risk.
  Low interest rates on investments are hurting retirees who need a higher interest rate to supplement their pensions and SS. Planning long ago doesn't help now with a 1.03 interest rate.
   But at the same time, older people have seen downsides before. We are much better able to put all the glitter and TV ads in perspective and decide what is essential and what is fluff. I really feel sorry for the working poor.They are doing the best they can but can't ever envision anything better than now.

[srkruzich]

Maybe, just a little. The companies that went overseas don't care because they aren't here any more, but little businesses might be helped somewhat. Some medium sized businesses have learned to be more efficient and make do with less.They are doing well with the employees they already have and aren't hiring.
  The Gov't needs to pay back the money "borrowed" from SS. 
Some banks are still hoarding money and not loaning it out. Some are so full of money they don't know what to do with it all. BoA is actually "charging" to put money in, (by paying less interest) because of the FDIC fees. Depositors are effectivley paying for their own FDIC insurance.The only folks getting loans are those with huge safety nets and no risk.
  Low interest rates on investments are hurting retirees who need a higher interest rate to supplement their pensions and SS. Planning long ago doesn't help now with a 1.03 interest rate.
   But at the same time, older people have seen downsides before. We are much better able to put all the glitter and TV ads in perspective and decide what is essential and what is fluff. I really feel sorry for the working poor.They are doing the best they can but can't ever envision anything better than now.

DAmn diane, yall asked for all this.  THIS IS KEYNESIAN Economics at work!  The reason corporations left is, they are double taxed here.  Not so in other countries (Keynesian economics 101).  The reason interest rates are so low is the feds are printing money that isn't there(keynesian economics 102).  The reason banks are hoarding money is it doesn't pay them to even loan it out(Keynesian economics 103).  And destruction of wealth and pensions is (Keynesian economics 104).  What this country needs is a good dose of Capitalism 101, Tax reduction 102, and this plan thats floating around 0% interest for corps that bring that 1 trillion dollars in overseas profit back to the US will kick the economy in overdrive.

[Diane Amberg]

What are you biting at me for?  I didn't say I agree with it, I was just explaining what I know about it. 
My word man, are you dyslexic or something? WARPH asked a question and I just gave my take on part of it. I didn't "ask' for anything!

[redcliffsw]

You're thinking that Keynesian (socialism) will maybe help "just a little" to get Americans working again?

It's these "little" Keynesian programs that keep adding up over the years, now look what we have.  Looks like
we all ought to change our thinking all the way instead of just a little.

[Warph]

 The Gov't needs to pay back the money "borrowed" from SS.  
Some banks are still hoarding money and not loaning it out. Some are so full of money they don't know what to do with it all. BoA is actually "charging" to put money in, (by paying less interest) because of the FDIC fees. Depositors are effectivley paying for their own FDIC insurance.The only folks getting loans are those with huge safety nets and no risk.  Low interest rates on investments are hurting retirees who need a higher interest rate to supplement their pensions and SS. Planning long ago doesn't help now with a 1.03 interest rate.

Well said, Diane... very well said!!!

No.

Does it seem self defeating to cut the very employee/employer taxes that fund the financially hemorrhaging Social Security & Medicare programs?  Almost half of this plan does just that.  Unintended consequences abound in this one.

Unemployment benefit extensions, while definitely critical to the unemployed, do nothing to create jobs, increasing the incentives not to seek employment and force a large segment of the unemployed population to adjust and become used to a lower standard of living than they might have if fully employed.  In short, it helps create an increasing dependency on government and will probably increase costs to businesses through increased employer 'contributions (taxes) to both state and federal unemployment insurance funds.  

Public works projects?  Sounds like more FDR mirroring.  Short term fix.  And in this case, aimed more at benefiting O's union cronies.  Remember, public sector union membership represents only about 7% if the US workforce.  Where's the work for the other 93%?  Looks like a perverse form of trickle down economics.  Inject money at union labor level, rather than at the employer level through tax relief, and it will somehow trickle out to the rest of the economy.  Don't think it will help.

Local government aid.  Big state government being fed by bigger federal government & helps keep government union jobs (read: union payback).   Nuff said.

Employer tax credits are great.... IF a business is making enough to hire new help and IF the employer has enough before tax earnings to make the credit helpful.  Why not just reduce the overall business tax rate, thereby giving the employer more to work with AND creating incentives for business to repatriate offshore money/labor?

In short, this 'plan' is just more fancy footwork and "too much government 2 step".  But sadly many repubs may buy into it, because it 'sounds like' tax reduction.  And the feds will still look to 'pay' for these cuts, meaning replacing any lost revenue.  No, this is just more government control masked as tax cuts.  What is it about LESS government that politicians don't get?

Man, you hit the nail on the head... dead center!  Ok, seriously, without invoking all the political rhetoric that is certain to gum up the discussion, there is something that I don't get.  Unemployment benefits are to be extended into a THIRD YEAR for people who lost their jobs?  I don't mean to be a grinch, and I'm not saying that this type of insurance (time limited, of course) is a bad thing, but paying people to wait until a job just as good as their old one comes along should not go on for a period that is measured in years.   More to the point, though, how is it a "jobs" initiative to pay people who, well, don't have jobs?  Again, even if you would persuade me that extending unemployment benefits is the right move, how would you persuade me that it is a "job creator?" It seems to me that it is just the opposite.... period.  

Now I think the ONLY thing on the list that will be helpful for creating jobs is the Employer Tax Cut for hiring new people who have been unemployed for an extended period of time.  Possibly retraining for unemployed who are in older fields and need to get updated skills.  

A better "jobs plan" would be to roll back much of the regulatory apparatus that is stifling profits and job creation, especially for small and medium-sized businesses. With so much regulatory overhead, firms aren't going to bite on some minor temporary tax reductions in order to increase hiring.  They need consistent and sustained regulatory relief in order to achieve some stability and begin hiring new workers.

[redcliffsw]

Consistant and sustained regulatory relief would mean making it like it was before the Federal Reserve was established and the Federal income tax was created - labout 1913.  Never had all that junk before then.  The founding fathers establsihed this country as right as they could and we ought to try to keep it right.   

The only real relief is to go by the Constitution.

[Diane Amberg]

I gather before you plan your day you read your Constitution with your corn flakes and your Bible after? 

[srkruzich]

I gather before you plan your day you read your Constitution with your corn flakes and your Bible after? 

That is the problem.  You and too many folks joke about the constitution which is not a joke.  It is being dismantled every day.  Time to start taking it seriously don't ya think?  Might wake up to find Comrad Joe is at your door ready to move peasents into your extra bedrooms because the state has deemed your house too big for two people!